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Companies Ditch Renting To Cut Property Costs

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http://uk.reuters.com/article/2013/06/21/uk-companies-property-idUKBRE95K0J920130621

After decades of renting being the norm, companies with offices in the world's major cities are seeing more financial sense in buying their own buildings, prompted by a mix of cheap debt, stockpiled cash and new accounting rules.

Having culled staff in the wake of the financial crisis, businesses are now scrutinising real estate costs and capitalising on an opportunity not present for at least half a century to cut what is often their second-highest outgoing.

As central banks keep interest rates historically low to kickstart economic growth, the resulting cheap cost of borrowing ends "fifty years of perceived wisdom" that companies shouldn't tie up cash in property, said Chris Simmons, founder of Real Estate Forecasting.

A bit of Friday VI property ramping.

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Sort of makes sense. In a command-economy those activities which enjoy the greatest subsidy are the ones which endure longest, at least until the system collapses entirely. Property ownership is for the British what driving a mobile missile launcher is for North Koreans.

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I thought commercial property was fairly cheap these days*. It makes sense for any company to own the freehold on its offices if it can finance it, refurbishment costs a fortune so you want to know that you have the benefit of it for many years.

* Apologies if I've bought the VI line but I thought that this was the case, in strong contrast to residential property.

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I thought commercial property was fairly cheap these days*. It makes sense for any company to own the freehold on its offices if it can finance it, refurbishment costs a fortune so you want to know that you have the benefit of it for many years.

* Apologies if I've bought the VI line but I thought that this was the case, in strong contrast to residential property.

Yeah I thought this - property maintenance and management isn't cheap either, makes sense to outsource it. Also, it's easier to move businesses based on services rather than manufacturing (I assume), so it doesn't pay to invest in property management - just move.

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  • 243 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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