I was at the Derby Property Summit yesterday – an impressive showcase for Derby held at the home of (Championship) football – Pride Park. The great and the good were gathered and there was no mention of Bobby Zamora – or his being given freedom of the City (Nottingham). I digress.
We have heard the story before that the Soth-East is over-heating and the regions have it all to play for. I’m not convinced that it’s quite as simple as that; London and the South East have a different dynamic – associated with a Capital city sat firmly on the world stage. The market doesn’t operate in quite the same way as the regions – the inward foreign investment makes sure of that.
One of the questions addressed by the panel was whether the private rented sector was coming of age outside the M25. This translates into – “will the major Institutions invest in our regional cities?”. It’s a fair question. The answer is complex.
5 years ago there was little or no institutional investment in residential property to speak of – let alone that investment being outside the M25. But times have changed and there is Institutional investment now – the money chases money and return. Residential property has come of age and now can provide a reasonable return. It does need quantity to spread risk. It was suggested that you need 800-1200 units to spread risk and make the investment worthwhile.
But the really interesting comment was that the regional cities need to get visibility with the Institutions – they need to sell themselves. And herein lies the rub – this is not easy. It is quite difficult to get the men in suits out of their London offices. It was a bit harsh to suggest that the fund managers are lazy. They’re not – they’re busy and a trip up here takes a day…
It does show how important it is for our cities to go to London. Both Nottingham and Derby do this – and they need to keep on doing it!
Notingham – the business plan – SWOT analysis – part four – “T”
The final part of the SWOT analysis – what are the threats to us?
This is a tough one – especially if we are to be honest.
In some ways we are our own biggest threat. I think we sometimes beat ourselves up when we don’t need to. I guess that is sometimes because we see better things on the other patch of green grass. And there is no harm in that. We should aspire to better. In fact the City are pushing a message of ‘good’ to ‘great’.
Politically the strength of the Labour movement locally can be perceived as a bad thing. Not because there are bad politicians but rather that opposition is ineffective. I’m not sure this is healthy – but I can’t seeing it change any time soon. I think this remains a threat to the City.
We also have two Cities close by who are snapping at our heels. We have Leicester with a bigger and more culturally diverse population and we have Derby who have a very clear marketing message and position – they punch above their weight. We have to be careful not to be complacent; simply saying we are ‘better’ doesn’t quite was in these times. We have to prove we are better.
Something that will emerge over the next few years (months?) is technology – and this threat applies to all major Cities. We have to be ready for the massive change in technology – particularly with the necessity to be connected. If we don’t get connected then we will suffer long term consequences. Fast internet connections, wifi, augmented reality applications and connections are going to play an increasingly important part of our lives.
Like all of the parts of this ‘business plan’ these things are all connected. Have I missed anything obvious?
My brief podcast…
I did an interview with Lisa Plkington from the Estates Gazette on all things East Midlands property market – and MIPIM 2014!
You can listen to is here.
A Market Insite… for the East Midlands
Next week sees the launch of my firms annual research into the stare of the East Midlands property market. We hold three breakfast events – starting on Wednesday in Nottingham.
The document sets out the position for the year ending 31 December 2013 – and compares it to the last 5 years. Although it is at the printers at the moment and I’m sworn to secrecy there are some interesting facts emerging. Some of my colleagues re clearly feeling a little bullish too.
This from Robert Hartley, Managing Director’ “While there may be some headwinds to come, the improvement in the economy does seem to have gained traction and we can look forward to 2014 with some confidence.”
Whilst the picture was a little more considered by my agency colleagues in Nottingham,
“The Greater Nottingham industrial market held steady in 2013. Although activity dipped 15% on the previous year, takeup maintained the ten-year average There were mixed fortunes for the office market, with the city centre market putting in one of its weakest performances on record, while the out of town market fared much better. Although the number of deals in the city centre remained constant year on year, with one notable exception, the lack of larger deals above the 5,000 sq ft bracket contributed to a reduction in the 12-month takeup figures when compared to the previous year. In contrast, the out of town market achieved a near doubling in the number of deals, resulting in a 70% upsurge in activity. The stellar performance by the out of town market wasn’t quite enough to make up for the shortfall experienced in the city, with overall take-up figures down 8% to 402,300 sq ft by the year end.”
If you would like a copy of the report when it is published – get in touch! If you would like to come to the launch breakfast – likewise!
Like Watching Ink Dry?
The Queen popped into the House of Lords yesterday and amidst the Ermine and parchment she made an ‘early’ announcement about High Speed 2 – to the extent that it’s got a green light.
Two Bills are likely in the next phase of Parliament – the first starting the London to Birmingham line then a further bill for the ‘Y’ to Manchester via Toton Nottingham and Sheffield.
Work might start on the line in 2016/17 and the first trains could run in 2026. But not in my back yard – we’ll have to wait until around 2032/3. So that’s 20 years away. That’s not going to help my frequent trips to the ‘smoke’.
The estimates on cost are around £32bn. But this is for rail at 250mph – meaning London to Toton could be 45 minutes. London to Leeds will be halved to just 57 minutes.
I am still a supporter of the HS2 line, I think it will allow us to get a competitive edge over some other cities. The disappointment is that it is going to take so long. Of the people I have talked to about this the support is unwavering, the frustration is the timescale.
I heard on the radio yesterday morning that it takes three days for the ink to dry on the goatskin vellum parchment the Queen reads from – waiting for HS2 is much like watching that ink dry?
The traffic gets worse?
There is something about that period after Christmas and just before the financial year end which screams “dig the roads up”. I suspect our road agencies have to get the cash out of the door before they use it?
But we seem to be moving toward a perfect storm in Nottingham at the moment. The tram works are causing localised issues – in the last few weeks the weather played its part and we seem to close roads quickly after accidents.
Last week I gave up heading over to Derby – it took me 2 hours to drive 9 miles – I would have been quicker on a bike! It seems that Derby had decided to dig its roads up that morning. But the following day I got delayed heading into Sheffield – that just seemed to be sheer volume of traffic.
I know that there are more cars on our roads – but we seem less and less able to manage this traffic. It was said that 100 years ago the average speed of traffic (on horses) was around 9mph in the cities. The same applies today – so is this progress?
I have the benefit of GPS in my car – it tells me of traffic jams – but all too often I can’t do anything about it. It usually tells me too late – or I have little alternative than to follow my original route like a leper over the edge of the cliff.
We really do need to sort out traffic. It may be easier said than done, but in the high-speed world we live in, the cost to business must be massive each time we get caught in traffic jams around the Country?
The East Midlands – land of opportunity
At our Market Insite event last week one of the speakers put up a slide with an interesting quote:
“The East Midlands is a region of opportunity. Confidence in its future is founded on its generally diversified economic activity… its past and present level of employment, and the relative absence of the disadvantages associated with massive and congested conurbation’s.”
We take out roadshow to Nottingham, Derby and Leicester over three consecutive days. We are all about the East Midlands in terms of our market knowledge. We do work further afield in certain sectors, but here is home.
What I didn’t tell you was that the quote was from 1969 – 44 years ago! It was part of a report by the then East Midlands Economic Planning Council. They sound like a laugh-a-minute types?
I thought the quote was telling. There are still opportunities here. We do have a diversification of activities and we are well connected. Getting around (well not this week to Derby – where it took me 2 hours to travel 14 miles!) is generally fairly painless. We are in the centre of the Country – London is within 100 minutes at the moment. Leeds is just over an hour by road.
We are not pinned in – and have plenty of room to grow. Housing is cheap and we have a skilled workforce.
There are great reasons come here – and we need to shout about them.
One of the other comments I heard last week was following our impatience to keep pressing forward. I think some of us a restless souls who want to keep pushing the case and making the place better. But someone said, tellingly, “you’re not doing too badly at all”…
I think we do beat ourselves up sometimes – and perhaps we are in a better place than we think. I still want it to be better though!!
HS2 Here we come!
As predicted last week – there was an announcement yesterday that the ‘Y’ line of HS2 (from Birmingham to Leeds) will have a stop in Nottingham – the location of which (as I gambled) will be at Toton Sidings. I got the day wrong last week – I thought it was to be today! I hope you didn’t lose too much money.
I have blogged about this before – my view is that this is really good news for Nottingham. It puts us firmly on the national and international map. Getting to London in under an hour is one part, but the ability to get into Europe at high speed will offer a viable alternative to flying.
It is time the UK had a proper world-class travel system. In Shanghai I have been on the mag-lev train at 267mph. It is incredible. We are still running on rails that in part are 50 years or more old. That’s why I often feel like I have been wrung out when I get to London! We need fast, smooth and clean trains.
So what next? Well there are some legal loopholes. It is expected that the first work will actually begin in 2017 – with the London – Birmingham route open in 2026 and our station in 2033. That’s a long way away. I can only hope that this Government sees the sense in bringing the whole project forward!
The headline facts and figures are:
The London to Birmingham line will be around 140 miles long;
The total network (Phase One: between London and Birmingham and linked to HS1; and Phase Two: links to Manchester and Leeds; and a Heathrow spur) will be around 330 miles of track;
More than half the Phase One route will be in cuttings or tunnels;
Around 56.5 miles of Phase One will be partially or totally hidden in cutting to reduce visual effects and noise in neighbouring communities;
In the Chilterns Area of Outstanding Natural Beauty (AONB) over 11 miles of the Phase One route will be in tunnel, green tunnel or cutting, with just over a mile and a half of the line on the surface.
The cost is estimated at £32.7bn (at 2011 prices). We need to start saving!
Lumpy – like porridge
It’s that time of year again when my firm, Innes England, publishes a look back at the previous years trading in the East Midlands marketplace.
We hold three events – in each of the cities where we have offices. Leicester was Tuesday, Derby yesterday and this morning the final one was in Nottingham yesterday. We get around 600 people to come along.
This is our 7th year of publishing data about key deals and average rents / capital values in the three cities. The last 5 years have been difficult stories to tell. It’s not pretty as they say. Most people in the Industry realise that the market remains a challenge. Money remains tight. Deals are scarce and tenant is king – at the moment. I don’t need to bore you with this data – you already know.
There is an interesting take on all of this – perhaps we are in a depression. We have certainly been in the doldrums for a long period – and I can’t see what is changing at the moment. I can’t help but wonder if this place we are in is the new ‘norm’. We hark back to the boom times of 2007 – but no one I speak to thinks that this era is back anytime soon. The sentiment in the market is not an optimistic one. Subdued would be an understatement!
Even the Bank of England speaker, Alistair Cunningham, said we shouldn’t get too excited about 2013. Growth is likely to remain non-existent.
So we bobble along the bottom again. For the foreseeable future
Will Rossiter Nottingham Business School summed it up nicely at our event yesterday – ‘the market is like porridge – lumpy’!
If you would like a copy of our Market Insite and couldn’t make the presentations let me know through here and I will make sure we get you a copy!
HS2 – an imminent announcement
It is widely expected that a Minister will make an announcement next week (put your money on Tuesday) about the route of HS2 rail – and whether the East Midlands will get a station. If we do – the six million dollar question will be ‘where’. I have covered this subject before – and we have been on a bit of a roller coaster ride.
HS2 would be good for the East Midlands in my view. I think we will miss out if the trains simply whistle by us. Stations will give places a competitive edge. It will certainly put us on the map!
The job creation during construction will be significant.
This morning I am at the third of my firms Market Insite events – more on that tomorrow. You might be able to guess that the market isn’t exactly booming!
There was real evidence when the east coat main line was electrified that values around station stops improved. When the first phase of Nottingham’s tram was built it was estimated that values of properties in the near vicinity rose by around 10%. More importantly tram stops kick-started stalled developments.
If we assume that we aren’t going to see a freeing up of money – then we need to see some major infrastructure projects?
HS2 would be a great project – if only it were to start sooner?
In the meantime if you want another little bet on whether there is going to be a Station in the East Midlands I would say the smart money is on ‘yes’. As to whether it goes to Derby or Nottingham – my money is ‘between the two’. At a place called Toton. There have been some interesting comments locally about an international rail station being called “Toton Sidings’, I suspect that it might get named properly – ‘Nottingham International’…