Jump to content
House Price Crash Forum
SNACR

Commercial Property Meltdown Begins In Earnest

Recommended Posts

http://www.propertyweek.com/story.asp?sect...3141680&c=1

Modus was a pretty big player in retail property and expanded aggressively in the past boom. They were a prolific press release generator spouting about how successful they were. I think they were the developer for a Swindon regeneration, which I guess will now be canned.

Other smaller players like Martin Myers' Mountgrange have gone under recently but, Modus is a step up. It's said a company is getting too blase about costs when it has a fish tank in reception. Oh and nearly forgot a Mountgrange Stud Farm too. I guess that applies to websites too:

http://www.mountgrange.com/people

Similarly, Mountgrange had a big development in Edinburgh which I'm guessing is canned too.

I know quite a bit about Modus and have never been keen on Flood who always enjoyed the limelight and being the big I am. Not too keen on one of his original backers Martin Abrahamson either. He's had a bad trot as well, I'd guess he's up to his neck in Modus and has already taken a bath on retail chains Passion For Perfume and Hitchens. There's no small irony that Abrahamson made his fortune hawking bankrupt stock.

Actually, just found this article, what a difference a year makes:

http://www.enforbusiness.com/features/market-trader-483.html

Have to say, I know it's bad but, I'm really enjoying the Schad on this one.

One down, lots to go. :lol:

Edit to add: You shouldn't really have to click on the Property Week link to guess which lender was funding these cretinous spiv junkies hooked on spending someone else's money.

Edited by Soon Not a Chain Retailer

Share this post


Link to post
Share on other sites

+1

This was about to drop off the screen, so though it deserved a bump.

Yes, I fully expect UK Commercial property to collapse further. The talk is of 60% falls peak to trough, though I believe this has already happened for London office space as the banks downsize.

Also seen that a local Esher surveyor has gone into administration http://www.cnpltd.co.uk/ . This is starting to hit real people, and I think the next 5-6 years will be tough for all property and property services firms.

Share this post


Link to post
Share on other sites

with GDP reducing, much commercial and industrial property just loses its value.

johnny foreigner has the same problem at his home too, so why invest here without government aid? he's going to have to compete with low chinese and later, african wages.

we need more productive firms worth billions like....facebook.

Share this post


Link to post
Share on other sites
I'll add the Telegraph link.

Wave of commercial property failures predicted

Commercial property is an excellent lead indicator of residential. When the cashflow drops it goes. There's none of this denial about what your house is "worth", it's worth the discounted future cashflow.

Also LUXURY housebuilder Applecross

http://business.scotsman.com/scotlandsecon...o-go.5293565.jp

The thing about this is that it will as drag prices down as finished or near finished homes are liquidated and secondly it chokes of work for the small support firms in the industry. We know brickies have had a hard time, but now the professional services are getting slaughtered. It bad news for many.

Share this post


Link to post
Share on other sites
I'll add the Telegraph link.

Wave of commercial property failures predicted

Commercial property is an excellent lead indicator of residential. When the cashflow drops it goes. There's none of this denial about what your house is "worth", it's worth the discounted future cashflow.

What you bears never mention, is that in Maidstone and Aberdeen, commercial properties are in a boom, and where they ARE empty, landlords just refuse to let them go for a low price or rental.

Add in that LAs, also wont reduce the Rates, then looking for a drop to help a fledgling or expanding business just aint gonna happen.....you sad business people will NEVER get a succesful business...you missed the boat.

Share this post


Link to post
Share on other sites
I'll add the Telegraph link.

Wave of commercial property failures predicted

Commercial property is an excellent lead indicator of residential. When the cashflow drops it goes. There's none of this denial about what your house is "worth", it's worth the discounted future cashflow.

Good article having now actually read it. Its the quarter day thing, and £43bn need to be paid in the next few weeks, ouch.

Share this post


Link to post
Share on other sites
What you bears never mention, is that in Maidstone and Aberdeen, commercial properties are in a boom, and where they ARE empty, landlords just refuse to let them go for a low price or rental.

Add in that LAs, also wont reduce the Rates, then looking for a drop to help a fledgling or expanding business just aint gonna happen.....you sad business people will NEVER get a succesful business...you missed the boat.

Good points, well made: Why cant the muppets on here see this.

START UP YOUR NEW BUSINESS NOW: IF YOU WAIT, YOU WILL NEVER BE ABLE TO AGAIN!

Edited by General Melchett

Share this post


Link to post
Share on other sites
What you bears never mention, is that in Maidstone and Aberdeen, commercial properties are in a boom, and where they ARE empty, landlords just refuse to let them go for a low price or rental.

Add in that LAs, also wont reduce the Rates, then looking for a drop to help a fledgling or expanding business just aint gonna happen.....you sad business people will NEVER get a succesful business...you missed the boat.

:lol: too subtle for everyone's favourite trolls.

Share this post


Link to post
Share on other sites
What you bears never mention, is that in Maidstone and Aberdeen, commercial properties are in a boom, and where they ARE empty, landlords just refuse to let them go for a low price or rental.

Add in that LAs, also wont reduce the Rates, then looking for a drop to help a fledgling or expanding business just aint gonna happen.....you sad business people will NEVER get a succesful business...you missed the boat.

Maidstone you say.... <scribbles furiously>

Share this post


Link to post
Share on other sites

http://www.propertyweek.com/story.asp?sect...orycode=3133895

13.02.09

By Sean McAllister

Sir Alan Sugar had some choice words when he was interviewed in London’s West End by PropertyWeek.com TV last week

Despite redundancies in the property industry becoming an all-too-frequent occurrence, last Wednesday more than 150 of London’s West End agents braved icy conditions and the prospect of being told they were ‘fired’ at a question-and-answer session with Sir Alan Sugar.

The gruff entrepreneur was pulling no punches as he answered questions from the audience and the host, Property Week editor Giles Barrie, about his views on property, the economy, The Apprentice and his time as chairman of Tottenham Hotspur Football Club.

It was part of Sugar’s push to promote the launch of 215 Great Portland Street – a 33,500 sq ft office development undertaken by his privately owned property company, Amsprop, which the audience was told has a quoting rent of £55/sq ft. Edward Charles & Partners is the letting agent on the scheme.

First, how did we not see the looming financial and economic mess? Sugar believes a herd mentality sucked people in. ‘We were being offered this building or that building for sale at 2% or 3% and told we had three and a half seconds to make up our mind, otherwise it would be sold to someone else.

‘You can get sucked in and ask yourself if you’re missing a trick. Before you know it, you’re lured into what other people are doing, like taking on 90% debt. Fortunately, we didn’t get lured in.’

But he has less insight to offer in terms of when the economy would start to recover.

‘I can only stick my finger in the air. We’re possibly at the bottom of the pit, or we could be on the verge of a bigger disaster. It’s just like a boom. You don’t know when you’re in a boom until you look back.’

Sugar thinks the turning point will come when the banks release their first-quarter financial statements, at which point we should know how much bad news there is to come.

‘Bankers have had a slapping. But they should start to settle down to some sensible lending – if they have any money to lend.’

Sugar decided to start investing in property through Amsprop, which he set up in 1985 and is now run by his son Daniel Sugar, because he wanted to divest proceeds from the sale of some of his businesses into property. He told the audience he considers property to be a ‘stable and boring’ investment.

So what does he think of the property professionals he has worked with? ‘Stable and boring.’

Be interesting to see just how sucked in he and his boy were.

Edited by insidetrack

Share this post


Link to post
Share on other sites

I was thinking about using my money to buy a small shop instead of a house. I already run a small business from home that I might run better from a shop. So can I ask for some advice? Is now a good time to buy a small commercial property? I am looking for smallish premises to run a bookshop, probably not on the main street, but in a convenient location just outside the town centre. What is a very rough price I can expect to pay? Where can I research local prices? Is there any good record of trends or individual transactions I can access? Are there any good tips for how I might go about negotiating the best price? Who is it best to buy from anyway and how do I find out how to go about it?

Share this post


Link to post
Share on other sites
I was thinking about using my money to buy a small shop instead of a house. I already run a small business from home that I might run better from a shop. So can I ask for some advice? Is now a good time to buy a small commercial property? I am looking for smallish premises to run a bookshop, probably not on the main street, but in a convenient location just outside the town centre. What is a very rough price I can expect to pay? Where can I research local prices? Is there any good record of trends or individual transactions I can access? Are there any good tips for how I might go about negotiating the best price? Who is it best to buy from anyway and how do I find out how to go about it?

What general area are you in region/county? How much sqft do you require?

Might be worthwhile if you could get something with residential over a shop plus enough space for mail order.

A lot of the prime pitches will be unavailable freehold. Need to be careful, it's terrifying how little off-pitch independents can take a day £10-£50 is not uncommon. The problem with retail shops is even ones in poor locations are going to attract significant business rates. If you can get one with residential and enough space to run your mail order whilst overseeing the shop for no more than you'd spend on a house then it's a bonus and could work. If not you'd be better off in cheap industrial space.

To get the best deal you would need to instruct an agent to act on your behalf, they keep most of the best deals to themselves in many cases and many deals go through without a sign or board even being put on the premises.

Share this post


Link to post
Share on other sites
It was part of Sugar’s push to promote the launch of 215 Great Portland Street – a 33,500 sq ft office development undertaken by his privately owned property company, Amsprop, which the audience was told has a quoting rent of £55/sq ft. Edward Charles & Partners is the letting agent on the scheme.

This shows the madness of it for £25k pa rent plus a likely £12k pa business rates you could rent an office the size of your garage. On top of that you could then spend hours each day commuting to it and forking out further for congestion charge and parking or rail fares. So why not just turn the garge into an office?

How do clients know where the office is most will never visit and just be on the receiving end of emails. They get no extra benefit from being billed to fund Central London offices and would have no idea the person dealing with them was sat in their underpants at home or Bangalore for that matter.

Share this post


Link to post
Share on other sites
Good points, well made: Why cant the muppets on here see this.

START UP YOUR NEW BUSINESS NOW: IF YOU WAIT, YOU WILL NEVER BE ABLE TO AGAIN!

Totally true. In fifty years' time when the last business owner has died, people will starve to death for lack of somewhere to buy food. Similarly, every house will be empty and the entire population will be living on the streets because all the houses will be too expensive.

Share this post


Link to post
Share on other sites

The future of London will certainly be interesting.. I can imagine a lot of existing companies (existing & startups) pulling out of the SE, as this article suggests..

http://www.ft.com/cms/s/0/456f39b4-4bb9-11...144feabdc0.html

New technologies and different ways of working will change the business landscape more radically than at any time since the industrial revolution, according to research commissioned by HSBC, the banking group.

Its report, published on Friday, creates a map of the business hubs it expects to develop over the next 20 years. Instead of pictograms of factories and coal mines familiar to past generations of schoolchildren, the new map is dominated by symbols for wind farms, robotics, nanotechnology and stem-cell research.

Many of the centres are outside London and the South East, underlining the potential that broadband connection creates for building businesses in outlying regions.

Although the Midlands and northern England are being hit hardest by the recession, the report argues that, in the longer term, mobile working could bridge the north-south divide.

Its predicted hotspots include Durham and Newcastle (nanotechnology), Manchester (stem cells and robotics), York (biotechnology) and Dundee (computer gaming, biotechnology and “nutraceuticals”, or foods with health benefits).

The report, by HSBC Commercial Banking and The Future Laboratory, a forecasting and strategy specialist, is based on interviews with 18 industry experts and a survey of 500 entrepreneurs and decision-makers in 17 UK cities.

Critics of futurology say it merely projects present trends into the future – and cannot predict unforeseen shifts – but the report is at least a guide to patterns emerging now.

“In the last decade, the notion of the ‘culture capital’ became a buzzword, as cities such as Cardiff, Newcastle, Gateshead, London and Liverpool worked with so-called ‘starchitects’ such as Norman Foster, Richard Rogers and Wilkinson Ayre to create business opportunities and global profiles,” Martin Raymond, the report’s author, said.

It selects five “supercities” that it thinks will derive prestige from new income streams or ways of working: Newcastle, Leeds, Liverpool, Brighton and London.

Whatever it does for innovation, the report may offend lovers of the English language with its use of jargon such as “bleisure”, the deliberate and desirable blurring of business and pleasure, and “emo-nomics”, an economic system based on emotional responses.

It identifies types of emerging entrepreneur. Liam Walsh, a 19-year-old, Brighton-based street magician, video editor, promotions manager and website builder is an example of the “slash/slash careerist” – so called because of the way they describe their various jobs, such as video editor/producer/promotions manager.

Darika Ahrens, a 29-year-old freelance new media consultant from Borough in London, is seen as a “referral economist”, a new breed of business matchmaker who profits from connecting people.

Many entrepreneurs are described as “New Millennials”: born between 1985 and 1990, a generation immersed in technology, now penetrating new and old businesses.

EXPERTISE IN THE NEWCASTLE PIPELINE

HSBC’s prediction that Newcastle will become a post-recession technology hotspot will come as no surprise to Nick Searby, writes Brian Groom. As managing director of Durham Pipeline Technology, which makes robots that crawl through oil and gas pipelines for cleaning, repair and maintenance, he is already convinced that access to talented graduates and good transport links make the city a perfect spot for budding entrepreneurs.

The company was spun off from Durham university in 2004 by Prof Ernie Appleton, who has since retired. It is now based at Gateshead, near Newcastle, where several pipeline companies are clustered around a General Electric technology centre. It employs nine people, most who were Durham students.

“There’s an awful lot of knowledge in Newcastle and the universities tap into that by providing specialised courses,” said Mr Searby, who joined 18 months ago from GE. “The cost of living is good compared to down south. It’s a really nice place to live. The airport’s good, so you can get out when you’ve had enough. All in all it’s a good place for graduates to start out.”

DPT hopes to break even by the end of this year and build annual turnover to £3m within two years. “The market size is tremendous,” said Mr Searby.

7b38eabe-4bb3-11de-b827-00144feabdc0.jpg

Edited by zagreb78

Share this post


Link to post
Share on other sites
The future of London will certainly be interesting.. I can imagine a lot of existing companies (existing & startups) pulling out of the SE, as this article suggests..

http://www.ft.com/cms/s/0/456f39b4-4bb9-11...144feabdc0.html

Nice thought it isn't going happen for a number of reasons, I should also mention that I run an IT services business so have a reasonable knowledge of where our clients work from (i.e if a VPN is needed for a home worker we know about it)

1. Money generally follows the chimmney pots, we are a service economy hence the most lucrative areas for any services business is where there is extreme density i.e London and the South East.

2. The technology for working in your pyjamas in the shed has been viable for over ten years and yet home working increasing yes, but not at a great rate

3. Working on a mobile basis is not new engineers, sales people, mobile project managers have been doing it for years, they were the low hanging fruit moving entire departments from an office to a home working basis is much harder.

4. Stazi Brown is on to it and is already starting to tax the S*** out of it, so the savings aren't what they were

5. Lost of people actually like having two lives, millions in fact with all that goes with it from office chit chat to romance. There isn't the groundswell you would imagine for home working.

6. Deals are still done face to face, in the pub at networking groups and through old fashioned networking again all tend to be where the action is.

I think we will have a blend but then senior managers and owners always have practiced that.

Edited by Greg Bowman

Share this post


Link to post
Share on other sites
I was thinking about using my money to buy a small shop instead of a house. I already run a small business from home that I might run better from a shop. So can I ask for some advice? Is now a good time to buy a small commercial property? I am looking for smallish premises to run a bookshop, probably not on the main street, but in a convenient location just outside the town centre. What is a very rough price I can expect to pay? Where can I research local prices? Is there any good record of trends or individual transactions I can access? Are there any good tips for how I might go about negotiating the best price? Who is it best to buy from anyway and how do I find out how to go about it?

I owned and ran a bookshop profitably for 16 years. First crucial questions. New books or secondhand/antiquarian? Population and demographic of the town? Even better if you name it. There's a hell of a difference between Hull and Durham; or Edinburgh and Milton Keynes. More info needed if you want advice. We can talk about full repairing leases and accomodation with shop or not etc later

Share this post


Link to post
Share on other sites
those small shops are jsut going to get cheaper and cheaper.

first story.

woman takes on shop in busy local high st,signs 7 year lease @ £20k p.a. + £8k rates.puts her home down as security.currently not even selling enough cards to clear the rent.

second.

woman running a wedding dress shop on same high st,moves premises to somewhere cheaper obviously thinking she won't have a problem shifting ehr lease on as there's normally massive demand for them.empty for a year up to now and no sign of it shifting.,

in both cases the LL's are making it worse for themselves.in first case they could cut the rent and she could maybe survive.won't happen,so there'll be another empty shop noone wants..

funnily enough,number of empty shops going skyward on said street.which has the effect of driving away custom.LL's in denial,trying to sell at 2007 prices

the reality is that most of these shops will only really make enough to clear the rates for the next few years,so I wouldn't buy for a while yet.

So, why not start a charity and open up your own charity shop and pay yourself a wage as its manager donating any profits made after expenses to local groups in your area. You'll receive a lot of free labour. You wont be paying for the stock and you'll receive 80% discount on rates.

Share this post


Link to post
Share on other sites
I owned and ran a bookshop profitably for 16 years. First crucial questions. New books or secondhand/antiquarian? Population and demographic of the town? Even better if you name it. There's a hell of a difference between Hull and Durham; or Edinburgh and Milton Keynes. More info needed if you want advice. We can talk about full repairing leases and accomodation with shop or not etc later

Greenock with a population of 50,000. There is a run-of-the-mill college (James Watt) and the town has an aging population with a significant numner of residents who commute to Glasgow and other towns. I would sell secondhand books, but also offer to order new and used books for customers. I have been selling books online for four years now and I made a profit of £33,000 last year from a turnover of £48,000. The main advantage I would hope to get from having a bricks and mortar shop would be to have a place where people can bring their books for me to buy, as well as offering a search/ordering service as I mentioned before. Selling books on the premises would be secondary, but hopefully provide some income nevertheless.

There are a couple of empty shops in a fairly central location but the rent they are asking is £9,000 and £11,000 per year. I would be looking more for something in the region of £6,000, and it does not need to be central. I don't know if that's realistic or possible but it's what I would be happy with. If I could buy a small place for less than £50,000 I would consider that.

Share this post


Link to post
Share on other sites
What general area are you in region/county? How much sqft do you require?

Might be worthwhile if you could get something with residential over a shop plus enough space for mail order.

A lot of the prime pitches will be unavailable freehold. Need to be careful, it's terrifying how little off-pitch independents can take a day £10-£50 is not uncommon. The problem with retail shops is even ones in poor locations are going to attract significant business rates. If you can get one with residential and enough space to run your mail order whilst overseeing the shop for no more than you'd spend on a house then it's a bonus and could work. If not you'd be better off in cheap industrial space.

To get the best deal you would need to instruct an agent to act on your behalf, they keep most of the best deals to themselves in many cases and many deals go through without a sign or board even being put on the premises.

I would only need quite a small place. I am not sure about measurements - maybe 40 square metres - is that about the size of three bedrooms or thereabouts?

How would I go about finding an agent?

If commercial property prices are going to drop in the coming years do you think I better hold off for a while? If I could buy a place cheap at the bottom of a crash of course that would be ideal. In any case I would not buy a place to start with. I would have to rent a place for maybe a year first just to see if the business is viable and if it works out as I imagined.

Share this post


Link to post
Share on other sites

Just drive around the town where you want the business and you'll see who the agents are as there will be To Let signs.

It might be a case that if a property is still not let after a while then it might be possible for the LL to rejig the layout. One of the properties that I looked at recently was to be let with 3 floors, but since we didnt need all three floors rent was very negotiable on the ground floor as the property had been empty for over a year. The voids must be hurting the landlords.

Edited by Yorkshire Lad

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   295 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.