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NEWS ANALYSIS MARKETS PROFESSIONAL
HMV pleads for monthly rents p5 Labour view p29 CBRE bosss 11.5m pay p17 Heron Towers hour p30 Hants, Dorset + Wiltshire p41 Newmarkets racing form p62 CoreNet Global salary survey p48 Interview for senior staff p65
Berkeleys banked (from left): Berkeley chairman Tony Pidgley, comedian Michael McIntyre and British Land chief executive Chris Grigg were the big stars at Tuesday nights Property Awards. More than 1,300 people packed into Londons Grosvenor House for the event, organised by Property Week. Go to propertyweek.com/awards2011

photographS: oLIVEr KNIght

CB Richard Ellis goes Countrywide

9 Worlds biggest property adviser taps into UK residential market with huge estate agency partnership
By NiCk JohNstoNE CB Richard Ellis has taken a huge leap into the lucrative residential property market through a tie-up with the UKs largest estate agency. The worlds biggest property services rm has entered into a nancially binding agreement with Countrywide to oer joint regional residential sales. Countrywide owns 46 high street brands and 1,300 branches. Its network includes Bairstow Eves, Beresford Adams, John D Wood, Wilson Peacock, Gascoigne-Pees, Alan de Maid and Austin & Wyatt. Sta were informed this week of the tie-up. Countrywide agents will pitch alongside CBRE sta and co-brand on instructions. A joint executive board, chaired on a rotational basis by CBRE UK managing director Martin Samworth and Countywide chief executive Grenville Turner, will lead the venture. It is unusual for a leading commercial-led agency to join a high street chain, but the two worlds interests are converging. Mixed-use development is driving the change. Commercial rms in particular are attracted by fees that are typically higher in the residential sector. Residential development fees can top 2% at least double most commercial fees. In a rst mandate, David Wilson Homes has instructed CBRE and Countrywide brand Chappell & Matthews to sell 40 semi-detached homes in Bristols Barrow Guerney. The agreement is also a widening of CBREs joint venture with south-east agent Hamptons International, which has existed since 2003. Countrywide bought Hamptons in June last year. It then began negotiations with CBRE to expand the agreement from Hamptons 64 branches to Countrywides 1,300. CBRE has long sought to rival rms such as Savills and Knight Frank in areas such as local residential sales, land valuations and social housing advice. The plan is that CBRE clients, such as government departments, will now have access to local knowledge and advice on the timing of land disposals or the local residential market. It is the latest development in a rapid expansion of CBREs residential team. Former Harrods Estates chief Mark Collins has been recruited to replace Nick Jopling as head of residential, following Joplings departure for listed landlord Grainger. Former Grainger managing director Andrew Pratt was then appointed as a consultant. Collins; CBRE executive director for residential Chris Lacey; Hamptons residential development director Godfrey Winterton; and Countrywide divisional director Tom Harris will be on the executive board. Continued on p4

CB Richard Ellis goes Countrywide

continued from front page Samworth said Countrywides local sales skills would allow the rm to oer clients a more local approach to residential marketing. He told Property Week: This is an extension of our existing relationship with Hamptons. Countrywide has a much greater reach than Hamptons on its own. Were dealing with a lot of land developments that have residential elements, and we need to improve our residential sales capability by using their infrastructure. On new home sales where we are involved, we will use the most relevant Countrywide brand to drive sales. In addition, if we need information on residential values in a certain part of the country, for example, we will get that with a phone call. Turner said: Some of the big commercial practices have been London based and require expertise elsewhere in the UK. You have agents who are really commercial agents working on mixed-use schemes.

NEWS

WR Berkley buys prized Prupim asset

US insurance rm WR Berkley has bought a City oce that could become its UK headquarters. In its second UK property purchase, the company has agreed to buy 52-54 Lime Street and 27 Leadenhall Street (pictured) one of seller Prupims longest-held assets for around 38m. The properties total 98,000 sq ft and could be refurbished or redeveloped. WR Berkley is understood to be contemplating moving its UK headquarters to the buildings from nearby 40 Lime Street. The company made its UK debut in January, when it bought 33 Grosvenor Gardens in Victoria for 160m. WR Berkley is listed on the New York Stock Exchange and specialises in property casualty insurance. Jones Lang LaSalle advised Prupim. DTZ advised WR Berkley. All parties declined to comment.

Asians fuel London resi fire

9 Frogmore and Galliard, Land Securities and Heron International all cash in on red-hot market
BY NICK JOHNSTONE AND MIKE PHILLIPS Developers working on prime London residential schemes are receiving a windfall, as overseas buyers continue to snap up o-plan sales in record time. A joint venture between Frogmore and Galliard has sold 80% of the ats it is developing at Marconi House on Londons Strand, just eight weeks after it started marketing them. Land Securities is understood to have sold 51 of the 59 units at its Wellington House scheme in Victoria. The penthouses at both schemes have been held back for sale at later date. Sixty per cent of Heron Internationals 284 ats at the Heron next to the Barbican in the City have been sold. Heron has halted the sale of units, so it can sell the rest at higher prices later on. Heron is also close to completing a deal to buy International House on Chiltern Street from Deloitte, the administrator to the collapsed subsidiaries of Targetfollow. It will then be converted to residential. Prices being achieved at these schemes are between 1,500-2,000/ sq ft. The o-plan sales underline the hot performance of the City residential market, where high-end ats are being sold to Asian investors months before project completion. Frogmore and Galliard sold 60 of the 65 units to overseas investors and 17 of the Marconi ats are worth more than 2m. Research from King Sturge shows 69% of overseas buyers in London are buying for investment and only 7% for their own occupation. International investors are attracted by the fact that sterling has devalued by around 20% against its 10-year average. Exchange gains have created a window of opportunity to acquire London stock at a discount. Tim Wright, partner at King Sturge selling Marconi House, said: Central London is very dierent from the rest of the UK. Most of it is bought by the super-rich. The interest is being generated from the huge wealth coming out of China. With the Olympics next year, now is a good chance to get into the market. James Thomas, head of residential property at Jones Lang LaSalle, said: There are several factors driving this performance. Currency is certainly an issue; people see central London residential as a status symbol; and the tax conditions are favourable.

Given wings: Heron has sold 60% of the Heron in City (pictured) and will hold the rest until prices rise

Seven days @

70 Gracechurch deal on table The Irish owner of 70 Gracechurch Street in the City is in talks to sell the building, which houses Marks & Spencer and Exel, for around 200m. 9 Full story at propertyweek.com

Mailbox deal delivered Brockton Capital and Milligan have completed their purchase of the Mailbox in Birmingham for 127.1m. 9 Details at propertyweek.com

Irish McInerney goes under The UK arm of Irish housebuilder McInerney Homes was placed into administration this week. 9 More at propertyweek.com

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Industrial trio for 110m

Henderson Global Investors is selling a selection of industrial assets for 110m, and the sale of the largest is due to complete imminently. The global fund manager is marketing the 50m Cyrus portfolio, alongside the 35m Gillingham Business Park and 27m of ex-Chancerygate business centres. The Cyrus portfolio is thought to contain three industrial assets in the southeast and has attracted a shortlist of six bidders. A spokeswoman for Henderson said: The portfolio is at bidding process and Henderson is condent that it will attract a strong price. Henderson Indirect Property Fund Europe (HIP), a 419m fund of funds, bought stakes in two UK property funds this week for 23.5m. The deal marks the funds rst investment in the UK property market. It has paid 11.7m for units in the Standard Life Core UK Shopping Centre Trust and 11.8m for units in the Unite UK Student Accommodation Fund.

Landlords dance to HMVs tune

9Retailersrequesttopayrentsmonthlyacceptedbymost
photograph: maxwell hamilton

Heineken refreshes West end

Heineken has taken 13,500 sq ft at Great Portland Estates Elsley Court on 20-30 Great Titcheld Street in Londons West End. The brewer has taken two oors on a 10-year lease with no breaks at 46.50/sq ft. It plans to open its rst Londondedicated marketing oce in the space. The oors were refurbished after the previous tenant, iLevel, vacated them last year. Edward Charles and Robert Irving Burns advised Great Portland; Montagu Evans advised Heineken.

tosortthebusinessoutand thiswillhelptoadegree.HMV areverydicultforustorefuse Strugglingmusicandbook retailerHMVGrouphasentered becauseofthevolumeofsales intonegotiationswithlandlords theystilldo.Ifyoutakethem outofashoppingcentre,you topayrentacrossitsportfolio wouldhavealotofcomplaints onamonthlybasis. andlandlordsneedtheiroer LandlordstoldProperty forbalanceontheirschemes. Weektheyhavereceived HMVandWaterstonesalso requestsfrombothHMV tendtooccupylargeunits, andWaterstonesoverthe whichiswhyitisthought pastfortnighttopayrent landlordshavebeenmore monthlyratherthan receptivetotheirrequests. quarterlyinadvancefor Inaprotwarningthisweek, anindeniteperiod. HMVrevealedtradinghad Therequesthasbeenmade asthegrouptriestoexitaround remaineddicult,assales ofDVDsandbookshave 60leasesastheythisyear comeupforrenewal.Thisweek continuedtodecline.Full-year pretaxprotsareexpectedto HMVGroupissueditsthird be30m,downfromthe45m protwarninginfourmonths. forecastinMarch. Itisthoughtmostlandlords HMValsosecuredastay haveacceptedtherequests ofexecutionthisweekonits fromHMVandWaterstones, butsomehaveplacedtheirown bankingcovenantsafterits restrictionsontheagreements. lenders,ledbyLloydsBanking Onelandlordsaid:Thisreally GroupandtheRoyalBankof Scotland,agreedtomovethe indicatesthattheyare measurementperiodforall throwingeverythingattrying by Kat baKer

relevantnancialcovenant testsfromtheyearto30April 2011totheyearto2July2011. HMVisexpectedtosellits Waterstonesbrand.The booksellersfounderTim WaterstoneandRussian oligarchAlexanderMamut arethoughttohavebeen givenuntiltheendofApril totableanoer. Highstreetretailershave facedatoughfewweeks. Consumerspendingand condenceisdroppingand retailersarestrugglingtostay aoat.AmericanApparelhas warnedthatitmayhavetole forbankruptcy,whileDixons andMothercarehaveboth issuedprotwarnings.Ocers Club,Oddbins,andAlworths haverecentlybeenplacedinto administration.AllSaintsisalso saidtobefacingadministration ifitcannotsecureaninvestor bytheendofthisweek. HMVGroupdeclined tocomment.

Morgans checking out of London Morgans Hotel Group aims to sell its Sanderson and St Martins Lane hotels in London for more than 210m. 9 Detailsatpropertyweek.com

John Lewis At Home in Newbury John Lewis has conrmed it will open a 40,000 sq ft At Home at Standard Life Investments Parkway shopping centre in Newbury in October. 9 Fullstoryatpropertyweek.com

Essex hub for Sainsburys Sainsburys is to develop a new logistics hub after buying an Essex industrial estate from Valad Europe. 9 Moreatpropertyweek.com

Councils will not get RDA assets The government has rejected calls to transfer ownership of regional development agency assets to local authorities and will sell them instead. 9 Fullstoryatpropertyweek.com

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Prupim takes 50m hit on Dundees Wellgate mall

9 Further woes for secondary retail as Invista places shopping centre under oer for less than half Prupim paid
by kat baker Invista Real Estate Investment Management is poised to buy the Wellgate Shopping Centre in Dundee for 62% less than owner Prupim paid for it. Invista has agreed to buy the 340,000 sq ft shopping centre on behalf of its St Jamess Place Fund, for around 31m, which will reect a net initial yield of around 11%. Prupim paid 80.3m for Wellgate in January 2007 to HBG UK (now BAM), at the height of the market. The drop in value has been exacerbated by a fall in rents at the centre and a 15% vacancy rate. The reduction in value is also indicative of concern among investors about secondary shopping centres that have to compete with nearby prime schemes when consumer condence and spending is dropping. Wellgate faces competition from the dominant Overgate Shopping Centre. Land Securities bought the centre for just less than 140m, reecting a 6.75% yield, in November. Similarly, in December the Mall fund sold the Mall Galleries in Bristol for 50.2m to HSBC European Active Real Estate Trust. The Mall paid Norwich Union 123m for the 330,000 sq ft shopping centre in 2004, but it then had to compete with Hammerson and Land Securities 1.1m sq ft Cabot Circus shopping centre, which opened in 2008. The sale of Wellgate, whose tenants include BHS, TJ Hughes, Iceland, Argos and Peacocks, is expected to exchange next week. In January Invista agreed a sale to Prupim of a 12.5% share of its 50% stake in the Fort shopping park in Birmingham for around 26m, reecting a 5.5% yield, as revealed by Property Week (news, 11.02.11). The remainder of Invistas stake was sold to Henderson Global Investors, the Merseyside Pension Fund and Aberdeen Asset Management. Invista is also bringing its 50% stake in Cardi Bay retail park to the market on behalf of its Equitable Life fund for around 27m, at a yield of 6.25%. FG Burnett acted for Invista; Cushman & Wakeeld and Smith Cole Wright acted for Prupim. All parties declined to comment.

rio tinto digs in at Paddington

Rio Tinto is poised to sign the rst new oce letting at Development Securities Paddington Central scheme for 18 months. The mining company is understood to have placed under oer 25,000 sq ft on a 15-year lease at 57.50/sq ft at the 230,000 sq ft Two Kingdom Street. The letting would be a boost for the 600m Paddington Central development, where there has been little news since Two Kingdom Street was completed in February 2010. The last letting was in October 2009, when AstraZeneca took two oors and an option on the third, leaving 160,000 sq ft remaining. This new letting at Paddington would be conrmation of Rio Tintos intention not to return to its former headquarters at 6 St Jamess Square, which is being redeveloped by Exemplar Properties. The conglomerate had planned to move executive sta from oces at 5 Aldermanbury Square in the City, back to St Jamess, but those plans are now understood to have been shelved. Most other workers at 6 St Jamess Square were moved in 2007 to Derwent Londons nearby Telstar House. The decision not to reoccupy the building could prompt Rio Tinto to sell the luxury oce and residential scheme once it has been redeveloped. Rio Tinto is believed to have been drawn to Paddington Central because it is near Telstar House. Savills and CB Richard Ellis are the letting agents on Paddington Central; Cushman & Wakeeld advises Rio Tinto. All parties declined to comment.

Wandsworth double for Mount anvil

Mount Anvil, the London developer, has bought a second site in Wandsworth, south London, for a 155m development. Cockpen House on Buckhold Road a former oce and warehouse block has planning consent for a mixed-use development. Mount Anvil plans a 75m scheme with 207 ats in four residential blocks with ground-oor retail and oces. Mount Anvil announced last month that it plans an 80m scheme next door to Cockpen House with Workspace Group. It will comprise 80,000 sq ft of oces and 209 ats. Killian Hurley, Mount Anvils chief executive, said: We worked closely with Workspace on this deal as the two sites are next to each other and together represent a comprehensive development, enhancing both residential values and rents for the new Workspace facility. Work will start on Cockpen House this summer and is scheduled for completion in 2014.

Lambert Smith Hampton fancies brew

Lambert Smith Hampton has recruited Sean Brew from DTZ to head its national property and asset management service. LSH has been seeking to expand its corporate nance and asset management teams to win more business from institutional investors. Last year it lured John Knowles, also from DTZ, to head its corporate nance business. Brew is a senior director at DTZ and is head of UK portfolio asset management. Ezra Nahome, LSH CEO, said: This is a key appointment.

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Leadenhall Triangle attracts 50 suitors

More than 50 parties have expressed an interest in buying the Leadenhall Triangle site in the City, formerly owned by clients of Investream. PWC, administrator of AM Holdings, DB5, DB6 and Optimum Properties has appointed Cooke & Powell to market ve adjacent City of London oces (pictured) known as Leadenhall Triangle to the market. The ve properties total 460,000 sq ft of oce and retail accommodation and there are more than 50 tenants, among them several substantial insurance sector occupiers. The estimated rental value of the properties is more than 12m a year. Administrator Mark Batten of PWC said: This sale provides a unique opportunity to purchase a multilet investment in the heart of Londons insurance district with great development and asset management potential. Furthermore, the corporate sale provides potential purchasers the opportunity to benet from valuable tax attributes. Brookeld has been buying up properties on the island site to gain an advantage over rival bidders. A shortlist of buyers will be chosen within three weeks.

Law firm goes off Aldgate Tower

9 Tight timetable at Stanhope City scheme too risky for Trowers & Hamlins
BY MIKE PHILLIPS Trowers & Hamlins has backed away from taking a prelet at the Aldgate Tower on the fringe of the City of London, as Stanhope completes the purchase of the development site. The prospective letting has been watched with interest in the City, as the law rm was considered one of the rst in a wave of occupiers to take prelets at City schemes under development. Trowers was expected to take around 100,000 sq ft at the scheme. Stanhope and Aldgate Holdings, its joint venture partner, completed the purchase of the site for the 300,000 sq ft tower this week. They have appointed Sir Robert McAlpine as contractor, with a view to starting construction in the middle of this year for completion by early 2013. Trowers & Hamlins senior partner Jonathan Adlington said: Our steering committee has been working with Stanhope and their professional team on Aldgate Tower since late last year. We have been working to deliver this new development for our partnerships occupation by late 2012, to coincide with our lease expiry in Sceptre Court. We have now, however, concluded that the tight timetable for occupation late 2012 is not a business risk that we can prudently take. We remain convinced that Aldgate Tower will provide high-quality and attractively priced oces in an improving area of the City. Trowers is advised by Knight Frank and is understood to be reviewing its options, which could include preleasing another scheme or moving to an already completed building. The law rm occupies space in 40 Sceptre Court near Tower Hill, and is looking for expansion space. David Camp, chief executive of Stanhope, said: We are well advanced with all activities to enable a start on site at Aldgate Tower this year. With the market improving and very limited committed grade A stock, we have strong tenant interest for this product, which we can deliver from 20,000 to 300,000 sq ft at very competitive rents. We are naturally disappointed that Trowers & Hamlins are not coming to the scheme but fully understand their decision. Savills acted for Stanhope on the purchase and is the letting agent. Among the other occupiers understood to be considering prelets in the City are Schroders, CMS Cameron McKenna and Aon, which is close to agreeing to take oce space at British Lands 122 Leadenhall Street.

Three Olympic finalists in running

IN BRIEF
St Katharine Docks up for sale F&C Reit Asset Management and Area Property Partners have appointed Franc Warwick to sell St Katharine Docks by Londons Tower Bridge for around 170m. The 167m debt secured against the property matured last summer. Colliers assigns Aldar man in City Colliers International has appointed John Campbell as a director in its City agency team to handle oce disposals and acquisitions. Campbell joins from Aldar Properties PJSC, the largest developer in Abu Dhabi, where he was the head of oce leasing for the last two years.

Delancey with Qatari Diar, Hutchison Whampoa, and Wellcome Trust have been shortlisted by the Olympic Delivery Authority (ODA) to buy and manage the 500m Olympic Village

in east London (above) after the 2012 games. The three parties were picked on Wednesday to make nal detailed oers and deliver 2,818 homes, which include 1,379 bought

by housing association Triathlon Homes. Last month it was revealed that the Wellcome Trust has made a 1bn oer to buy the freehold for the other Olympic venues,

including the 1m sq ft International Broadcast and Media Centre, Olympic Stadium and the Aquatics Centre. Its plans to develop a science and research park after the games. Following competitive submissions, selected private sector organisations were invited to submit detailed proposals in January 2011. Among the bidders that did not made to the nal round were Galliard Homes; Grainger with Mooreld Group; US real estate company the LeFrak Organisation with insurer Aviva and bank JP Morgan; Raymond Mould and Patrick Vaughans London & Stamford Property with housebuilder David Wilson and contractor Sir Robert McAlpine; and William Pears Group with Urban Splash.

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IN BRIEF
TNT Post receives Swift package TNT Post, the direct mail supplier, has signed a 10-year lease with a ve-year break at 3.50/sq ft for 115,000 sq ft at Swift Valley Industrial Estate in Rugby. Strutt & Parker advised TNT. Benson renances Milton Keynes site Benson Elliot has raised 12.4m by renancing its CBXII building in Milton Keynes. It has let 7,000 sq ft to Global Radio on a 10-year lease at an undisclosed rent. The oce is now fully let. Benson Elliot bought the property in March 2010. Grange plans Tower Hill hotel Grange Hotels has placed the 100 Minories site in Londons Tower Hill under oer for around 20m. The site was put up for sale by London Metropolitan University. Grange is expected to create a 250-bed hotel. Drivers Jonas Deloitte advised London Met. All parties declined to comment. Luminar to ooad three more clubs Luminar Leisure will sell a further three of its nightclubs: the 25,000 sq ft Liquid and Envy on Stevenage Leisure Park in Stevenage; the 16,412 sq ft Elements and Legends on King Street in Wigan; and the 16,894 sq ft Fuse on Church Road in Redditch. Hammerson progresses Didcot plan Hammerson has entered an agreement with South Oxfordshire District Council to kickstart the 125m regeneration of Didcot town centre. The project will comprise a shopping complex and town centre amenities on a 10 acre site next to the Orchard Centre, which opened in 2005.

NEWS

Haribo is sweet on Leeds distribution site

9 Squeezed confectionery manufacturer to expand into former Pioneer facility
BY PATRICK GOWER German sweet manufacturer Haribo has bought a 46 acre site near Leeds on which it plans to develop a 500,000 sq ft production and distribution facility. Haribo purchased the site for around 6m. The rm is understood to be squeezed inside its present headquarters in Pontefract, Wakeeld, after double-digit year-on-year sales growth for the past three years. It has been looking for a suitable area to expand nearby. Pioneer Electronics formerly owned the site, which comprises the 200,000 sq ft Pioneer House warehouse on a 15 acre plot and an adjacent 21 acre plot that has been allocated for expansion. Normanton has emerged as a leading distribution location in West Yorkshire in recent years. Asda, TK Maxx, Carlsberg, Tetley and Tibbett & Britten occupy nearby distribution facilities. A developer is yet to be appointed but an architect has been recruited and the tendering process for construction will begin once planning has been approved. King Sturge was the sales agent. Haribo conrmed the transaction and said it would not move out of its two-storey factory in Pontefract, where it employs 545 people. Herwig Vennekens, managing

PHOTOGRAPH: FDECOMITE

Everyone loves it so: Haribo needs to expand after huge sales growth

director of Haribo UK, said: Any developments agreed by the company are in addition to and as an extension of our current facilities and headquarters based in Pontefract. Haribo arrived in the UK in 1972 after buying a stake in Yorkshire company Dunhills, which it bought outright in 1994. The rm sells an average of around 250 million bags of sweets in the UK each year. Last years sales were 114.8m. The purchase follows an announcement by Waitrose

this week of an agreement with Evander Properties and British Airways Pension Fund to build a 400,000 sq ft distribution centre in Chorley, Lancashire. Subject to planning consent, the 30 acre former BAE Systems site will become the supermarkets fth regional distribution centre. Waitrose is pursuing rapid expansion in the north. Evander will develop the buildings with 35m provided by British Airways Pension Fund. Waitrose will carry out t-out works and will lease the site from the pension fund for 25 years.

Savills ushers in new northern era

Savills is due to announce that it has appointed Peter Mallinder as head of the northern region and Patrick Joynson as head of its Manchester oce. The appointments coincide with the rms relocation to Belvedere at 12 Booth Street in Manchester on 18 April. The duo take over from Howard Morgan, who has led the Manchester oce since 2008. Morgan will continue to lead the rms building consultancy team in Manchester, which he has built up over the last 13 years. Savills established the Manchester oce in 1996 with three people: commercial chairman Mark Ridley, Peter Mallinder and Patrick Joynson. After 15 years, the oce now employs more than 150 members of sta. Investment director Mallinder and oce agency director Joynson will continue with their fee-earning roles. Mark Ridley, chairman and chief executive of Savills commercial, said: As our northern operation aims to grow further, with Savills Manchester oce the largest outside London, it was felt that dual-responsibility leadership, with Peter and Patrick at the helm, is the best way of taking the oce and region forward.

Axas Voyager of discovery

Axa Real Estate Investment Managers and Canmoor Developments have completed the purchase of an 8.5 acre site in Farnborough from Terrace Hill. The site will be branded as Voyager and is on the Farnborough Aerospace Centre, next to Farnborough airport. The site has access to the airport and the M3 motorway at junctions 4 and 4a. The partners are targeting prelets of between 40,000 sq ft and 200,000 sq ft and will consider a wide range of uses, subject to planning, such as warehouse and industrial, oces and research and development. Dowley Turner Real Estate advised on the purchase of the site for Axa REIM and Canmmor Developments and is marketing the site with joint agent Hollis Hockley.

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UK
Tenants ahoy
Cowan & Rutter was this week instructed to nd an oce tenant for the Enterprise (pictured), which oers views of the Thames from ones desk. The boat is moored at Cadogan Pier and oers 3,000 sq ft of open-plan and cellular oce space, available to buy for more than 1m, or to rent at 100,000 a year. It is believed to be owned by investment company Boultbee, which also has its headquarters at the pier. The vessel has a pied-a-terre and a boardroom that overlooks Albert Bridge.

Bericote recruits Spencer

Bericote Properties has appointed Simon Spencer (right) as development director. Founder of specialist developer Isis Land, Spencer spent two years working with Bericote directors Richard Grass and Steven Ferris from 2005 at Astral Developments, before it was sold to Prologis for around 20m in 2007. The takeover gave Prologis control of 30 development sites across the UK. Spencer left Prologis in 2008 and set up Isis Land shortly afterwards. He brings with him management mandates from Aviva Investors and RREEF in Northampton and Leeds. Bericote director Richard Saint said: We have a land bank of more than 200 acres which provides for more than 4m sq ft of distribution development.

Delancey buys Citys Plantation Place for 460m

9 Jamie Ritblat seals purchase of debt-laden scheme developed by his father when at British Land
BY MIKE PHILLIPS Jamie Ritblats Delancey has agreed to buy Plantation Place, the City of London scheme that was developed by his father, for around 460m, reecting a 5.75% yield. Delancey is understood to be in the nal stages of negotiating the purchase of the 550,000 sq ft property, which was developed by Sir John Ritblat when he was chief executive of British Land. Delancey is understood to be backed by a division of the Qatar Investment Authority. Propertyweek.com revealed that Delancey had teamed up with Qatar to bid for the property (18.03.11). A consortium that included Invista Foundation Property Trust, Starion and Stobart Group bought Plantation Place in 2005 for 525m. Delancey is thought to be buying the units in the fund created to hold the property. It will put in cash to pay down debt and rectify the breach of loan-to-value covenant that has been outstanding for more than two years. The building was last valued at 425m, and there is 435m of debt secured against it. It will pay a fee up front to the unit holders, who will also keep a right to future prots if the building is sold on for a higher value at a later date. Another fee is payable in 2013. Last year Delancey, which holds some of the debt secured against the building, used its position to block proposals to sell the property on the open market. It is this blocking stake that has allowed it to secure the purchase. Delancey is at the vanguard of opportunity funds that are seeking to buy into complex debt situations where companies or assets are overleveraged. Last December it agreed to asset manage a portfolio of assets with 900m of Royal Bank of Scotland debt secured against it that was bought by Glenn Mauds Propinvest. Delancey has also completed several other transactions with RBS. The deal at Plantation Place will mark the end of one of the Citys longest-running restructuring sagas. Investors such as MGPA have proposed alternative restructurings, but until now bond holders have not agreed to any. GM Real Estate and Brookland Partners are advising the owners of Plantation Place. All parties declined to comment.

Roxhill lands at Inverness airport

Roxhill Developments is to develop a 400,000 sq ft business park in Inverness. Roxhill this week entered into a joint venture with Inverness Airport Business Park to develop its 30 acre site. It is the developers rst deal since it received funding from Forum Partners and developer-investor Mark Glatmans Abstract Securities last month. The 30m development will comprise 200,000 sq ft of industrial space, 100,000 sq ft of oces and a hotel, all on a 3 acre site. The largest building is expected to be 50,000 sq ft and the scheme will be built over a seven-year period. Inverness Airport Business Park is a joint venture between public airport company Highlands and Islands Airports, landowner Moray Estates and development agency Highlands and Islands Enterprise. Roxhill is seeking prelets. Colliers International and Ryden are the letting agents.

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Global
squarestone Brasils Golden moment
Squarestone Brasil, the AIM-listed Brazilian development company, has secured funding to develop the Golden Square shopping mall in Sao Paulo. US-based private equity rm Walton Street Capital and Brazilian investment bank BTG Pactual will provide the funds to Squarestone Brasils wholly owned subsidiary, SB Brast Participacoes. Through the agreement, SB Brast will receive R$192.5m (72.60m) to complete the project. Construction of the 330,000 sq ft scheme is expected to begin in the next three weeks and Golden Square is scheduled to open by the third quarter of 2012. Squarestone Brasil will pay R$95.2m to acquire the remaining 50% of Golden Square that it does not already own and to settle the outstanding amount it owes for its original 50% purchase.

Bahrains reputation damaged as firms exit

9 Knight Frank, DTZ and Cluttons among those rethinking presence in kingdom
By Nick JohNstoNe Companies with oces in Bahrain are considering relocating or scaling back their operations in the unsettled Gulf state. The recent unrest appears to have permanently damaged Bahrains status as a deregulated, west-friendly springboard into Saudi Arabia. Knight Frank is reducing sta numbers in the country, after it was forced to temporarily relocate all workers last month. Its workforce in Bahrain has been cut from nine to four since the turmoil that began in February erupted into violence. DTZ and Cluttons were also forced to shut their oces between 21 and 25 March. Cluttons is understood to be cutting sta from 30 to 20 in the medium term. Jeremy Waters, partner in charge of the Middle East at Knight Frank, said: Historically, Bahrain has been the business-friendly region. It was an important commercial centre in the Gulf. We will be moving people into the United Arab Emirates as a result of the unrest, specically to Abu Dhabi, where we have a joint venture with the National Bank of Abu Dhabi. Cushman & Wakeeld won a mandate to manage the Bahrain World Trade Centre last year, and set up its 25-man Bahraini operation on 1 February, just days before the trouble started. Mike Atkins, Middle East partner at Cushman, said: The timing is tough. We have a plan to expand and Bahrain is a launchpad into Saudi Arabia. Now, we will expand, but more cautiously. Other property consultants in the country said its occupier-friendly image had been permanently damaged. Bahrain had a reputation for being stable and deregulated, and provided a platform for gaining access to Saudi Arabia via the King Fahd Causeway. Fifty-ve per cent of Bahrains population is from overseas and it last year ranked third in the world in HSBCs Expat Explorer survey. But with the causeway closed by the Saudi Arabian government, the Formula 1 Grand Prix postponed and soldiers on the streets, Bahrain residents said it had been irrevocably aected. Hotel occupancy levels have dropped from 80% to 10%, retail is suering because Saudi shoppers can no longer enter via the causeway and a package of stabilising measures worth 10bn from the Gulf states is unlikely to be enough to salvage Bahrains image. One expat consultant said: People who were considering coming to Bahrain may do so no longer. Companies may not grow as much, and people may scale down their operations. A drop in oce take-up is likely and, as oversupply is already an issue, rental rates will also drop, experts predict.

IN BRIEF
Savills Albert victorious in China Savills has appointed Albert Lau as managing director of its China business. Lau has led the Shanghai operation as managing director since July 2002 and takes responsibility for Savills operations across 12 oces in mainland China. Asia leads residential price boom Monaco remains the worlds most expensive residential location, followed by London, Knight Frank and Citi Private Banks annual Wealth Report showed this week. Almost 40% of 85 prime city and second home locations rose in value during 2010 17 by 10% or more, the report said. Shanghai topped the price growth league table with a 21% increase. Six of the 10 biggest risers were in Asia, reecting the regions continuing economic boom.

Qatari Diar makes its Us debut in Washington Dc

Qatari Diar, the property investment arm of the Qatar Investment Authority, has made its US debut with a $700m purchase. Qatari Diar is the cornerstone investor in a fund that is nancing a 10 acre scheme in Washington DC. Barwa Bank investment banking subsidiary First Investor has raised the equity to fund the mixeduse scheme (right). Construction of the Hines and Archstone-led development commenced on 23 March. It is expected to be completed by the fourth quarter of 2013. The rst phase of the project is a pedestrianfriendly neighbourhood of more than 185,000 sq ft of retail, at the base of six buildings that will provide 674 homes and 520,000 sq ft of oces. The project also provides 1,555 parking spaces and nearly an acre of open public spaces. A second phase of the project proposes a 350room high-end hotel, along with an additional 110,000 sq ft of retail. CB Richard Ellis and Tanween are advising First Investor.

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Finance

CBREs White earns $11m

9 CEO is highest-paid director at listed property company and JLL bosses follow close behind
BY JAMES WHITMORE Brett White, CEO of CB Richard Ellis, received $11.5m (7.1m) in remuneration last year after the rm achieved a sixfold increase in prot. White was the highest-paid director at a listed property services company in 2010, receiving a salary of $809,135, stock awards of $7.5m and a cash bonus of $3.2m. This was 60% higher than in 2009, when he received $7.2m. His remuneration was boosted by a $7.5m CEO retention award that was given to him last March. The 552,282 shares vest ve years from the time of the grant on 4 March 2015. CBREs remuneration committee said the award accomplished two goals: First, to adjust Mr Whites compensation as appropriate for his position in a manner that aligns Mr Whites interests with that of our stockholders; and second, to provide a signicant incentive for Mr White to remain employed with the company at least through 2015. The details of the directors compensation were revealed last Friday in CBREs statement to shareholders in advance of its annual general meeting on 11 May (table, right). White was the only CBRE director to receive a stock award. The other ve directors received less remuneration in 2010 than in 2009, when they all received stock awards. President Bob Sulentic received $2.7m, chief nancial ocer Gil Borok $1m, president of

CBRE and JLL executive director compensation in 2010 ($)

Director CB RICHARD ELLIS Brett White, CEO Bob Sulentic, president Gil Borok, CFO Calvin Frese, president global services Michael Latte, president Americas Mike Strong, president EMEA JONES LANG LASALLE Colin Dyer, CEO Lauralee Martin, COO and CFO Alastair Hughes, CEO AsiaPacic Je Jacobson, CEO LaSalle Investment Management Peter Roberts, CEO Americas Christian Ulbrich, CEO EMEA 750,000 425,000 350,000 350,000 350,000 350,000 2.32m 1.21m 1.03m 250,000 1.13m 882,500 3.38m 2.45m 2.11m 791,500 2.36m 1.91m 26,397 25,344 253,616 902,787 21,902 79,501 6.47m 4.11m 3.75m 2.29m 3.87m 3.22m 809,135 671,991 434,615 577,404 520,288 472,115 7.5m 3.23m 1.9m 570,000 1.71m 1.33m 1.35m* 124,396 440 440 440 11.54m 2.7m 1.0m 2.29m 1.85m 1.82m Salary Stock awards Cash bonus Other payments Total

* Mike Strongs bonus included 320,000 from the UK business prot share pool.
SOURCES: CB RICHARD ELLIS/JONES LANG LASALLE

global services Calvin Frese $2.3m, Americas president Michael Latte $1.85m and Europe, Middle East and Africa president Mike Strong $1.8m. All six directors had their salaries restored to pre-recession levels and annual performance target awards restored to 95% of normal levels. In 2010 CBRE increased its net prot from $33.3m in 2009 to $200.3m and its EBITDA (earnings before interest, taxes, depreciation and amortisation) by 74% to $647.5m. Jones Lang LaSalles six directors,

who comprise its global executive committee, were also well rewarded for a much-improved nancial performance last year. A similar statement to shareholders in advance of its annual general meeting on 26 May, posted last Friday, shows that the directors generally received at least double the amount of remuneration in 2010 than in 2009. JLLs remuneration committee said the rm recorded the highest level of revenue [$2.9bn] in its history during 2010 and used its strong cashow to

reduce its total net debt and strengthen its investment-grade balance sheet. Its net prot was $154m, compared with a net loss of $4m in 2009. CEO Colin Dyer was the top earner, receiving $6.5m in salary, stock awards and bonuses. Chief operating and nancial ocer Lauralee Martin received $4.1m, Asia-Pacic CEO Alastair Hughes $3.75m, LaSalle Investment Management CEO Je Jacobson $2.3m, Americas CEO Peter Roberts $3.9m and EMEA CEO Christian Ulbrich $3.2m.

Crest Nicholson debt restructuring to lead to Varde takeover

US hedge fund Varde is expected to push through a scheme of arrangement to complete its debt restructuring at housebuilder Crest Nicholson in the next six weeks. The plan is expected to lead to a full takeover of the company by July through a debt-for-equity swap, and pave the way for a possible return to the stock market. Varde, which is being advised by former Hammerson chief executive John Richards, has been buying Crests 500m debt since last autumn and is now working formally with the management on the restructuring after taking control of 80% of the company last month. Crest was owned by a consortium of 24 banks after a 630m debt-for-equity swap in March 2009, which itself restructured the 1.2bn takeover of the housebuilder by Sir Tom Hunter and HBOS at the peak of the housing market in 2007. Varde secured a foothold in Crest last September when it bought the 30% interest of HBOS owner Lloyds Banking Group. Vardes takeover is expected to bring debt down to 150m at Crest, which is on target to build nearly 2,000 homes this year. The company is reported to be trading well, is spite of its complicated ownership structure.

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Finance

L&Gs 100m fund llip

Legal & General Property has secured a further 100m of equity for its UK Property Income Fund. The equity has come from institutional investors in France, Finland, Switzerland and Japan, and increases the funds net asset value to more than 250m and gross asset value to above 400m. Raising equity for real estate funds remains challenging, said Bill Hughes, head of L&G Property. We are aware of many funds that have failed to achieve a close, and others that havent grown since modest rst closes. We plan to bring several active conversations to a head in the next few months, prior to a nal close in September. The fund seeks to generate returns of 15% geared and 10% ungeared, focusing on acquiring larger properties, which oer opportunities to add value. The fund aims to provide two-thirds of the target return through quarterly income distribution. The fund has an innovative debt structure, which enables both geared and ungeared investments, providing investors with the exibility to select their optimal level of leverage. Debt has been provided by Eurohypo. New commitments have been evenly split between those with debt and those without. L&G said this endorsed the funds structure as being attractive to a wider group of investors than a fund running a single debt strategy. The fund has already spent 213m on assets such as Fremlin Walk Shopping Centre in Maidstone, Guildford Business Park and a distribution centre at Andover, prelet to Co-op. Cushman & Wakeeld Corporate Finance acted as placement agent.

bahraini moves its stake out of storage

Bahraini investment rm Arcapita Bank has sold its majority stake in 72 European self-storage facilities for 412m. Arcapita has sold the 80% stake to Brusselsbased storage company Shurgard Europe, which owns the remaining 20% of the portfolio. Arcapita and Shurgard formed their rst joint venture to develop self-storage in 2003, and since then have built a portfolio of 72 self-storage facilities, totalling almost 4m sq ft across seven European countries. The investments have beneted from their geographic diversity and their limited exposure to the slower performers among the European economies, said Atif Abdulmalik, Arcapitas chief executive. The economic downturn presented a number of challenges, but the real estate group has worked closely with our joint venture partner at the portfolio level to protect the interests of our investors. Arcapita mainly invests on behalf of wealthy Arabian Gulf clients.

ING UK Real Estate Income Trust to be reborn as Picton

9 Present fund manager Michael Morris to become chief executive of internally managed company
by jamEs whITmoRE ING UK Real Estate Income Trust ushered in a new era this week with a change of name and management structure. The company, the third largest of the Guernsey-domiciled property investment companies, is to internalise its investment management function, as Property Week revealed ve months ago (12.11.10) and change its name to Picton Property Income next month. The name comes from a General Picton pub, which the company once owned. Picton fought with Wellington at the Battle of Waterloo. ING Real Estate Investment Management, which has managed the company since it was listed in 2005, will relinquish its role at the end of this year. Michael Morris (pictured), the present fund manager, will lead the internalisation process and become chief executive of Picton later this month. He will be joined by ING REIM colleague Andrew Dewhirst, who will become nance director. Morris said his team would comprise around a dozen people, who will move to a new headquarters at 28 Austin Friars in the City of London, which the company owns. Chairman Nick Thompson said the internalisation would provide an aligned management team structure focused solely on the companys interests, a signicant cost saving over the short-to-medium term, anticipated to be in the region of 400,000 a year, and the potential to attract a wider group of investors. He said the decision to internalise had been taken after ING announced last year its intention to sell ING REIM. CBRE Investors bought ING REIM for $1.2bn in February. Thompson said the company was considering converting to a REIT in the wake of the governments plan to scrap the REIT conversion charge, which would have cost Picton around 8m. The companys results for 2010, published this week, showed an 8.6% increase in net asset value to 63p a share. At the end of the year it completed the NAV-accretive acquisition of Rugby Estates Investment Trust for a mix of shares and cash. This increased the size of its portfolio to 424m, comprising 70 assets throughout the UK. Morris said the portfolio focus would continue to be on maximising income. The dividend of 4p a share paid for 2010 was fully covered and reects a 7.5% yield. He is also working on renancing the 171.6m securitised debt facility, which comprises the bulk of the companys 222m of debt. The facility, which has a loan-tovalue ratio of just 45.5%, matures in January 2013.

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Finance
You cant hide from the economic prot yield
Economic prot has much to commend it as a performance metric because it is dened as net operating prot after tax, less a charge for all the capital used by the business. However, it does not address the actual eciency of value creation and destruction within a business, which is clearly a key determinant of corporate success and also share price. In addition, there is an apples with apples problem associated with comparing large portfolios or companies with smaller ones. To overcome this issue, we have developed the concept of economic prot yield. This may be dened as economic prot divided by total assets. It enables us to measure the economic performance of a portfolio or company per unit of asset value, thereby enabling interportfolio comparison and the viable assessment of large companies against smaller ones. Economic prot yield also oers better clarity over how much performance is being driven by exogenous market factors, such as a shift in valuation yields, and how much is attributable to discernable management action. Economic prot yield enables us to understand just how eective management teams are over and above what the market would have produced anyway.

NEWS

Great Portland is top of the REITs

9 Bell-Mallens economic prot yield rewrites valuation of REITs
BY JAMES WHITMORE Great Portland Estates was the best-performing listed property company in the last six years, groundbreaking new research reveals. The central London REIT, headed by Toby Courtauld, performed better than Land Securities in second place, followed by Helical Bar, Hammerson, British Land and, nally, Segro, in a detailed examination of the six companies using a new measurement of economic prot yield (graph, below). The research, revealed today by Property Week, has been carried out by the Bell-Mallen Partnership, an independent consulting practice formed in 2009 by Roger Bell, former director of strategy at Segro, and Steve Mallen, former global head of research at Knight Frank and director of property research and strategy at Henderson Global Investors. Last September, their rst piece of research revealed that the ve largest UK REITs collectively destroyed 24.1bn of shareholder value in the noughties a massive gure that was far greater than their then combined stock market worth of 17bn. Between 2000 and 2009, Land Securities, British Land, Hammerson, Segro and Liberty International generated cumulative losses of 6.1bn, 6.4bn, 3.8bn, 3bn and 4.8bn respectively, in terms of economic prot a key measure in developing business strategies in other sectors. Economic prot is dened as NOPAT (net operating prot after tax), less a charge for all the capital in a business. It is a technique based on the idea, originally proposed by economist Adam Smith, that a company can only acknowledge a prot once all costs have been accounted for. Now Bell-Mallen has developed the concept of economic prot a stage further to calculate an economic prot yield, which is dened as the economic prot per unit of asset (box, left). This allows large companies to be compared with small enterprises. This analysis is highly revealing, said Mallen. On a like-for-like basis, we are able to compare the value-creation characteristics of all listed companies and their component portfolios. Importantly, we are able to distinguish between the pure eects of market cycle and the real impact of management strategy at both a tactical and strategic level. Some strategies are inevitably better than others with inter-company comparisons being especially revealing and challenging for senior management teams. Over the 2005-to-2010 period Great Portland had the highest average economic prot yield at 1.9%, followed by Land Securities (-1.8%), Helical Bar (-2.8%), Hammerson (-4.4%), British Land (-4.7%) and Segro (-6.2%). In 2010 the rapid improvement in the central London investment market led to a spectacular economic prot yield of 9.8% for Great Portland the group average was only 3.3%. Great Portland also posted the highest total shareholder return in 2010 and Segro languished as a signicant underperformer.

REITs economic prot yield (%)

25 20 15 10 5 0 -5 -10 -15 -20 -25 -30 -35 -40 2005 2006 2007

GREAT PORTLAND

Steve Mallen (left) is former global head of research at Knight Frank, and Roger Bell is former director of strategy at Segro. They have formed the Bell-Mallen Partnership (www.bellmallen.com)

HAMMERSON BRITISH LAND SEGRO

HELICAL BAR AVERAGE LAND SECURITIES

2008 2009 2010
SOURCE: BELL-MALLEN PARTNERSHIP

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NEWS

Recovery
DTZ makes hard work of climbing debt mountain
City sources claim quoted agency needs to renance. Mike Phillips reports

DTZs share price almost halved to 28p last month exactly the same level it nished on 17 December 2008. That was the day before the company announced plans to raise up to 57m in a rescue capital raising. DTZ needed to restructure its debt with the Royal Bank of Scotland, most of which was taken on to buy Donaldsons at the peak of the market. In the prospectus for that capital raising, DTZ admitted it was on the brink of collapse and that if it did not raise the money, RBS could put it into administration. The company is not in the same situation today its loan covenants are not in breach and it told Property Week last week that it was comfortable with its nancial structure after a renancing in December last year. But City sources insist it is likely DTZ will need to raise new equity to reduce its debt to a more manageable level. It is worth asking how, after more than two years in which chief executive Paul Idzik has stripped tens of millions of costs out of the business, DTZ nds itself in the eyes of stock market investors in the same place it was during the week before Christmas 2008.

EBITDA was supposed to be 2.5:1. These debt facilities were restructured again in December, however DTZ declined to disclose the new relaxed covenants. In a statement to Property Week, DTZ said: Having renanced bank facilities in December last year, on improved terms with greater exibility, DTZ is comfortable with its current nancing arrangements and will not comment on speculation regarding what the group may or may not do to address the longer-term issue of reducing its net debt.

Prot struggle Key terms of DTZs debt facilities

Facilities as at 31 October 2010 INTEREST MARGIN To 31 July 2011 1 August 2011 to 31 July 2012 1 August 2012 to 31 July 2013 1 August 2013 to 31 July 2014 1 August 2014 onwards DEBT FACILITIES (000) Zero coupon tranche Term loan: tranche Term loan: HK$ tranche Revolving credit facility REPAYMENT SCHEDULE (000) Within one year One to two years Two to three years Three to four years Four to ve years After ve years 12,500 15,000 59,505 12,500 15,000 59,505
SOURCE: DTZ

Amended facilities as at 14 December 2010 1.75% 2.00% 2.50% 3.00% 3.50%

1.75% 2.50% 3.00% 3.50% 3.50%

20,000 54,744 12,034 15,000

25,000 49,744 12,034 15,000

Debt reckoning
The answer lies in its debt. DTZ had gross debt of just less than 110m at the end of October last year, split across four dierent facilities, each carrying dierent interest rates. With 27m of cash, net debt was around 81m. The companys EBITDA (earnings before interest, tax, depreciation and amortisation) in the half-year to 31 October was 200,000. Analysts at Collins Stewart predict the companys EBITDA in the year to 30 April 2011 will be 7m, giving the company a net debt-to-EBITDA ratio of more than 11:1. This metric of debt to EBITDA is seen as a key barometer of whether a services rm is overleveraged. A ratio of between 3:1 and 4:1 is regarded as the acceptable average. In the rights issue prospectus, DTZ outlined revised covenant terms on its loans from RBS, which were restructured using cash raised in the rights issue. By 31 July of this year, the ratio of net debt to 12-month

DTZs gures at a glance (m)

2009 Total turnover Sta costs Finance expenses Prot before tax and non-recurring items Operating prots EBITDA 364.1 -269.4 -7.7 -35.1 -33.0 -24.6 2010 356.0 -240.9 -5.2 3.6 6.5 14.2 2011 350.1 -241.6 -4.9 -2.1 -0.7 7.0 2012 375.9 -254.8 -6.1 5.2 8.3 15.8 2013 414.1 -273.4 -6.6 16.8 20.4 27.9

SOURCE: COLLINS STEWART RESEARCH

Broadly speaking: City whispers around DTZs Old Broad Street headquarters suggest it needs to raise fresh equity

DTZ has found it harder than most listed competitors to return to protability as the market recovers. This is in spite of having a strong UK business, and an incredibly strong Asian business it is the largest commercial agent in the growing powerhouse of China. Part of the problem lies in the loss-making continental European business, but it also comes down to the amount of cash needed to service interest on the debt, which is costing the company 5m-7m a year. The RBS facilities are generally in line with commercial terms for services businesses (table, left). However, two 15m mezzanine loans one of which is fully drawn down provided by SGP, the French company that owns 55% of DTZ, come at punative interest rates. Both facilities have a cash interest rate of 4% above the European interbank oered rate (EURIBOR), and also a payment in kind (PIK) note with a coupon 7% above EURIBOR. This gives a total interest rate well above 11%, with the 7% PIK note rolled up and added on to the principle of the loan. DTZ could, of course, raise fresh capital to pay back some or all of its debt. This would need the support of SPG, and would likely lead to the other shareholders in the companys already small free oat being further diluted. A long-term renancing would be required if DTZ were to try to pay back its debt using prots and cashow. It has to renance some of its debt in 2013 and there is little likelihood of prots increasing suciently to pay down signicant amounts of debt before then. It could sell businesses, but those with signicant value are those it wants to keep. The companys results for the year to 30 April, expected in June or July, could be its most important yet. 9

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NEWS

Banks|Asset management|Turnaround

RECOVERY POSITION Stuart Buchanan

Six renancings that prove there is life in lending

ince the beginning of the year, property lending Base and LIBOR rates There is a consensus among lenders conditions apart from some increases in pricing that base rates and LIBOR (London inter-bank oered rate) appear to have stabilised. will increase this year. Taking an average of the commonly Because lenders now have diering ideas about which projected increases, the base rate is expected to be at 1% property assets they want to lend on, this can lead investors by the end of the year and LIBOR is also expected to follow to think that the nance market is closed. a similar pattern. However, if the same property is taken to the right lender, Swap rates With base rates projected to reach 3% by the it will probably be able to provide acceptable terms. Lenders end of 2012, it is anticipated that swap rates will rise are being quite consistent with their terms, as long as the throughout 2011. property asset falls within their lending criteria. Here are some examples of recent nancings secured in Investors who are considering unlocking equity from an the market: existing property, need funds for a new purchase or have an Short-lease properties These were three properties with existing property term loan coming to an end in 2011, should lease lengths of between three and ve years comprising a particularly consider the following points: bank and two retail investments. The loan was 1.5m at a 58% 9 Finance is expected to cost less in the early part of 2011 LTV with a margin of 2.45% over a ve-year swap rate and a than in the last quarter ve-year term loan. 9 It is important to go to the correct lender for your specic Financing to enable a new purchase An unencumbered property there is no longer one Co-op supermarket was used lender who nances all properties. as security for a ve-year There are ve main lenders that are interest-only facility to buy reducing their UK property exposure another investment property. in 2011 and they are expected to The loan was for 1.2m with pursue this strategy for the next two an initial ve-year interestto three years. So when looking for only period and a 10-year nance, it makes sense to discount capital and interest repayment these lenders at the outset term. The margin was 2.5% 9 Interest-only facilities are still over a ve-year swap rate. available for good-quality assets Bank and supermarket Branch lines: banks are open 9 Do not let a propertys lease portfolio A portfolio for business on specic assets become too short before renancing. consisting of two banks and The key nancial metrics we are two supermarkets with a seeing out there are: combined value of 4m and Loan terms In the year to date, most lenders have oered with unbroken leases between 10 and 15 years. The loan was loans with a maximum term of ve years. This is mainly for 2.2m with a 55% LTV and the interest margin was 2.25% because of the Basel III banking regulations, which require over LIBOR with a 20-year amortisation prole. banks to hold more capital on their balance sheets for Mixed commercial and residential portfolio A portfolio longer-term loans. Unless there is a change to these of ve commercial and residential mixed investments with local regulations, which seems unlikely, this trend is here to stay. covenant commercial tenants. The portfolio was valued at Lending margins Margins increased throughout 2010 and 1.5m. The loan was for 1m with an interest margin of 3% that trend has continued in to 2011. Standard margins now and a 20-year capital and interest loan. range from 2.25%-3.25%. Hotel/fast-food outlet development Finance to build Loan-to-value ratios It is unusual for commercial property a hotel and fast-food outlet using two existing investment investment to be able to attract nance with more than a 70% properties (a Tesco and a Wickes store) as security. There loan-to-value (LTV) ratio. To achieve this, lenders will inevitably was a 4m loan with an interest margin of 2.75% over the require the asset to be let on a lease term of more than 15 years. Bank of England base rate. Break clauses Regardless of the term of the lease, all Enterprise Inn pub purchase Finance for an Enterprise Inn lenders now assume as a matter of course that, if there pub, the loan was 55% LTV at a margin of 3.3% over base rate is a break clause in a lease, that is when the lease will with a seven-year term and a 15-year amortisation prole. end. There is no element of optimism in their analysis Stuart Buchanan is head of nance at auctioneer Acuitus of these situations.

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ANALYSIS
LEADER Giles Barrie, editor-in-chief

Radical rethink needed by retail property chiefs

Tuesday nights Property Awards were buzzing. There were 1,320 people in the Grosvenor House Great Room, some superb winners and a brilliant performance from Michael McIntyre, Britains biggest comedy star. But for the guests that operate nationally there was an underlying cause for concern: retail. Anecdotal evidence suggested all retailers, from John Lewis to House of Fraser, Marks & Spencer to Next and Sainsburys to Tesco, had a very tough February and March indeed. Marks & Spencers rst-quarter trading statement on Wednesday lifted the gloom a little, but with like-for-like UK sales up just 0.1% and food gains oset by falls in general merchandise, it was hardly a roaring success. In 2010, landlords need to make retaining tenants their number one goal. We argued here that landlords should not back JJB Sports company voluntary arrangement (Property Week, 15.02.11). We still stand by that because we believe that its business model is fundamentally unsound. But now that even the best brands in retail are struggling, landlords need to do all they can to ensure these retailers do not close their stores. Reletting a unit is far more expensive than conceding ground to a retailer in the short term, and the decay caused by allowing vacancies to spread throughout a high street or shopping centre is too awful for any landlord to bear. In the longer term, though, there needs to be a more considered debate. After an upheaval the size of the credit crunch of 2008 and recession of 2009, conditions never return to the same as before. In property, there are new faces: from David Atkins at the helm of Hammerson to Charles Maudsley in charge of retail at British Land to other new bosses at institutions such as Hermes, LaSalle and Standard Life. Although many diehard property directors at big retailers are still battling for their rights, there are also new chief execs at John Lewis and Marks & Spencer and at supermarket giants Tesco and Morrisons. Turnover a new leaf On all sides, this allows for the sacrices that should be made, because our retail leasing system is utterly clapped out. Retailers should give up the security of tenure enshrined in the Landlord and Tenant Act 1954. It is wrong for failing retailers to be allowed to cling on. If there is a danger they will be booted out, they will work harder to drive footfall. In return, landlords should consider scrapping rent reviews and look towards a continental model that is turnover based or index linked. Of course there needs to be a base rent to fund development, but reviews are a costly system that looks badly out of date. There is also a strong argument, in an era when energy is such a huge contributory cost, for service charges to be capped or index linked. We do not condone fundamental reform of the British retail leasing system on a retrospective basis. But one of our REITs could do a great service to retail property by using the leasing programme for its next shopping centre development as a test bed for the radical model outlined above.

Whats new @
An update on the status Kuo
The events in Libya and Japan have dominated the news during the last month, and the economic impacts of both will no doubt reverberate around the world. Find out how in the latest podcast with nancial expert Dr David Kuo of investment blog the Motley Fool. It is available free from propertyweek.com/podcast and iTunes.

A toast in aid of Shelter

Time is running out to enter Property Weeks David Doyles marathon pub quiz this Tuesday. Henderson Global Investors head of property James Darkins is taking the role of quiz master. There is also an auction and a rae for two Club Wembley tickets to England vs Switzerland. The pub quiz is being held at the Stamford Arms near Waterloo in aid of Shelter. Tickets are 5, or 25 for a team of six. Email David at david.doyle@propertyweek.com

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Opinion

CITY VIEW Catherine Croft

Brilliant Broadgate deserves listed status, not a death sentence

here can be little doubt that Broadgate remains, in be the most coherent and successful parts of Broadgate architectural and planning terms, the most signicant architecturally, and particularly admires the way that they and successful commercial development in London of are clustered primarily around the award-winning Broadgate the post-war period. Arena, there are other key individual buildings. Perhaps most The provision of generous public space and artwork, notable amongst these are Exchange House and Bishopsgate. alongside commercial buildings, brought an entirely Both were designed by SOM and have been extensively written new template to London. It was inuential in its speed of about and praised. construction, as well as in its design and use of lavish materials. While the boldly expressed truss of Exchange House exploits It exudes condence and panache and continues to challenge the extensive air rights over the train tracks , and the chunkily categorisation: part post-modern and part high-tech. We are oversized detailing of Bishopsgate are easy to dismiss as brash, still digesting these legacies, and of course it also integrates both buildings reward a fresh visit. Returning with a critical eye a fantastic to Broadgate, I restoration of was impressed Liverpool Street the buildings station. Above are more subtle all it works, and responsive to delightfully. the site and brief Walk through at than is initially practically any apparent. time of day and We have had you will see many cases people enjoying where a buildings the sense of light original architect and space, sitting has approached and relaxing, us and asked us as well as to put its work generating an forward for almost un-British listing, but as far energy and as we are aware dynamism. Broadgate is rst Out with the old: the celebrated 1 Broadgate It is not just time that the (left) would be demolished to make way for the individual developer is British Lands 700,000 sq ft HQ for UBS buildings, but calling for Broadgate as a preservation. whole that is But Sir Stuart signicant. To that end, the Twentieth Century Society has Lipton is, however, right to regard Broadgate as a substantial requested that the City of London designate the whole achievement, and one that deserves to survive and bring development as a conservation area and asked the secretary pleasure to future generations. of state to list numbers 1 and 4 Broadgate, both of which were We know that the City, mindful of its desire to continue designed by Arup Associates and completed in 1991. to provide potential sites within its tiny boundaries for development and expansion, was never likely to be bold Broadgate appeal enough to say yes to a Broadgate conservation area. It is That date is important, as none of the development is yet 30 technically possible for English Heritage to designate one years old, so no part of it can be listed unless it is judged regardless, or for the secretary of state to list either all or to be both of outstanding quality grade I or II* part of the development. standard and under threat. We have had trouble getting recognition for many buildings Numbers 1 and 4 Broadgate are the only two perceived as troublesome monuments to the welfare state, buildings proposed for demolition, and hence the but they belong to a dierent world to this bit of enlightened only individual ones to meet the criteria. Other capitalist bombast. parties have now put the whole development in for Of course, many of the former have suered from skimpy grade-II* listing, arguing that it should be considered original budgets and lack of maintenance and upkeep, while as a single construction of which a signicant part Broadgate was generously funded from the rst and is is at risk this seems a reasonable argument in unaltered give or take the odd extra sandwich bar the circumstances. and meticulously cared for. Wheres the controversy? Although the Twentieth Century Society Catherine Croft is director of the Twentieth Century Society considers the Arup phases of the development to

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Opinion

ANALYSIS

LAbour LeAder David Taylor

Come back, Hezza and Prezza all is forgiven

s an avid reader of my good friend Steve Norriss columns during Labours years in power, I look forward to returning the compliment. Steven, what a mess! As a longstanding Labour man, you might expect me to say that. However, as I survey the wreckage of our planning system and regeneration delivery vehicles, my plea in mitigation of a balanced view is that I must be one of the few people who have reported directly to both Hezza and Prezza on these issues. One of the interesting ironies over the last few decades is that the two men were poles apart politically but had many similarities. Both had vision, a set of clear strategic objectives and the drive to implement them all qualities sadly absent from the present political scenario. Heseltine set out to pioneer new ways to channel private sector investment into our inner city areas. He also pioneered the concept of local authorities working directly with the private sector to achieve common objectives via City Challenge, one of the best post-war regeneration initiatives. Prescotts vision was of powerful English regions, each with their own development agency. His objective was the delivery of economic development at a regional level. He also pioneered numerous private nance initiatives, and was one of the few ministers to challenge the stiing orthodoxy of the Treasury and win. It was Prescott who single-handedly delivered the funding for the Channel Tunnel Rail Link.

Good concepts, bad policies

Incoming governments only have the briefest of periods to set out their vision and key policy objectives. The arrival of the coalition heralded the new agenda of the big society and localism. Neither of these concepts is necessarily a bad thing. The problem is that the dislocated policies being set out to deliver them create a series of fundamental tensions that I would argue are almost universally negative for the development and construction sector. If we consider localism in terms of the revisions Eric Pickles is steamrolling over our planning system, it seems almost impossible to envisage the construction of a new airport, power station, motorway or railway, and bidding for the Olympics just forget it. Under the guise of returning power to a local level,

nimbyism is bound to be the prevailing inuence for many years to come. One example is the ongoing consultation on High Speed 2. To date, the consultation has identied only three local authority supporters: the Greater London Authority, Birmingham City Council and Manchester City Council. Almost every local authority has objected to the proposed route. And so we awaited George Osbornes Budget to see what the bright new breed of Cameron/Clegg politicians would bring forward in terms of innovative new policies. What did we get? Enterprise zones. The best that can be said about enterprise zones is that, along with the billions spent on Jubilee Line and the Docklands Light Railway, enterprise zone status may have played a small part in Canary Wharfs huge success. However, a report by independent authority Work Foundation pointed out that nationally 86% of companies in enterprise zones came from within the same county. So much for the growth agenda. The same report noted that, of the rst group of enterprise zones approved, only 13,000 of the 63,000 jobs created could be categorised as new. To complicate matters further, the chancellors commitment of just 100m to cover the rst 10 of these new zones seems very modest compared with its earlier iteration. As local economic partnerships struggle to get o the ground, it should be noted that imaginative and ambitious local programmes or localism will need to be funded by a fraction of the nancial resources that were previously available. I acknowledge that cuts were inevitable, given the banking bailout and the plight of our public nances. The point is the rate at which these cuts need to be made. And if there are less resources, how can we best target that expenditure to promote economic growth and sustain employment? What we need is a Prezza or a Hezza. What we got was Pickles, an old-style, right-wing Tory, who is showing so far that cold ideology will have deadly consequences for our sector, our economy and our disadvantaged communities. As the cuts bite, social unrest will be on the horizon. In these dicult times we need a visionary, not a bruiser.
David Taylor is a developer, a board member of the Olympic Delivery Authority, a former adviser to John Prescott and supported Ed Milibands leadership campaign

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Week ending 03.04.11

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1 GL Hearn takes steps after surveyors four-letter email exchange 2 Settlement in controversial rights of light case 3 Ocers Club administration prompts Blue Inc buy 4 Wheeler and Brixton end employment row 5 Oddbins applies to go into administration ahead of CVA vote

oR 17bn waste of money that could be spent elsewhere 65.6%

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Development

ANALYSIS

ND THE GLORY
A
s the sun set last Monday evening, Gerald Ronson stood with his wife, Dame Gail Ronson, on the deserted 41st oor of the newly completed Heron Tower on Bishopsgate in the City of London, sharing a glass of champagne. From here, London looks like a scale model. Buildings that are imposing from ground level, such as Minervas St Botolphs or Citypoint, are dwarfed. Gail got quite emotional, because she hadnt seen it nished before, Ronson says. Me, I just see things that still arent quite right. His legendary attention to detail coming to the fore, Ronson says there is a 10,560-point list that needs to be actioned before the building ocially opens in September. I defy anyone to come around in three months time and nd a single one that still isnt done. Property Week was on Monday granted an exclusive preview tour around the 440,000 sq ft, 46-storey tower. The rst occupier, US law rm McDermott Will & Emery, moved in last week. After more than 13 years in conception and a delivery period that spanned events that stopped many a fearful tower developer 9/11 and the global credit crunch (timeline, overleaf) the opening of the Heron Tower is a landmark event for Ronson, Heron International and London itself. The tower began its life when Heron bought a portfolio from Degi, which included Kempson House and Bishops House, where the tower now stands, and Stone House next door, which will be demolished next year to make way for the Heron Plaza and a 42-storey Four Seasons hotel and serviced apartment tower. Development of the Kohn Pederson Foxdesigned tower commenced in October 2007. Only one other oce building of similar scale, Hines Cannon Place, is due for completion this year, so Heron has the leasing market to itself. On the basis that its fully let in three to four years time, the building will have been almost 20 years in conception, Ronson says. To be a developer, you have to have vision. Yes, there have been some dicult periods for the market during that time. But when youre in the game, and the ball is rolling, you cant stop halfway through. If you believe in the product, and you believe in London, you go on. This is a business for men. It is clear that Ronson believes in the product. Despite that action list, the specication of the building is phenomenal (box, overleaf). The lobbys 12 metre long, 70,000 litre aquarium, soon to be lled with 1,200 sh, is a spectacular sight on entrance. An innovative computerised

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ANALYSIS

Development
double-decker lift system means workers will never have to wait longer than 25 seconds for a lift. As Ronson lovingly shows o the marble in the bathrooms, he says: Thats what you get in a real building. But you have to pay real rents. Theres no other building in London that is nished to this quality, and probably not the world, Ronson says, a view echoed by Max Sinclair, head of the London oce at Eurohypo, one of the banks that provided a 370m loan to fund the 500m development costs alongside Heron and Saudi Arabian and Omani equity partners. When we funded the project in 2007, the world was a dierent place, but everyone involved has maintained their commitment to delivering an incredibly high-quality building, says Sinclair.

Fusion food
On the 38th to 40th oors, US restaurant group Sushisamba will operate two restaurants, which includes its oshoot Sugarcane concept, and a bar, which will have outside terraces for the summer and be shut for just three hours a day. Jogging upstairs from the 40th to 41st oors, Ronson proudly displays what must be the money shot on the tour for occupiers stunning views of London in almost every direction. A triumvirate of sporting landmarks is visible: Wembley to the north-west, the Emirates stadium to the north and the new Olympic stadium to the east. The fact that the buildings core is built at the south-east corner allows the oorplate to be almost entirely open. The chief executive can stand anywhere and see the whole of the oor, and you can see the view in every direction from anywhere on the oor, says Herons managing director of property Peter Ferrari. Everything looks tiny from up here, Ronson adds. The tower is designed to provide villages of 36,000 sq ft or 72,000 sq ft whereby occupiers can take three or six oors connected by a central atrium. This allows them to have what Ferrari describes as a building within a building. McDermott Will & Emery occupies two oors in such a village, and has already decided to take an option to expand into a third. You can have your own sign on the door, and for our type of tenant it gives you an identity and prole that they wouldnt otherwise have, says Ferrari. Looking down from the upper oor of one of these villages, if an occupier needed to just take one or two oors, would other tenants not be able to see down into their oces?

Floor show: the tower provides villages of 36,000 sq ft or 72,000 sq ft (above) and the lobby boasts a huge sh tank (below) as well as a concierge

HERON TOWER: CONCEPTION TO COM

August 1998 Heron completes 430m portfolio purchase from Degi, including buildings that form site May 2000 Plans unveiled for Heron Tower, then 37 storeys high November 2001 Heron defeats English Heritage opposition to tower

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The glass has a special lm on it, Ferrari says. If you are looking directly out, you can see through the glass perfectly, but if you are looking down from an angle, it is opaque. As well as the high quality of the bricks and mortar, Heron has worked overtime on the level of service it can provide to occupiers. The buildings 12,000 sq ft oorplates were always intended to be multi-let on opening, rather than let to one large occupier or large chunks of space to a few tenants. Heron aims to provide a service for businesses that is equivalent to that of a hotel. The bowler-hatted doorman that greets you is just the beginning. Service is everything, Ronson says. Weve got a concierge service, so if you want to order a pizza at 2 am or get your dry cleaning done, you can. There are bilingual sta in the reception. If youre a businessman you demand that sort of service. The world has moved on in terms of leases. You dont get a 25-year lease with regular ve-year uplifts anymore, so you have to oer better service. We wont do ve-minute leases if you want that, you can go to Landmark [the serviced oce occupier that has taken 36,000 sq ft at the building]. But we have to be exible and provide the best service. If you look at the Seagram building in New York, thats multi-let and it has been an iconic building for more than 50 years. Its always been almost fully let and the rents have always been more than 15% higher than the average for the area. Thats what we think we can do here. Multi-let buildings allow people to expand as their businesses grow. On opening, Heron Tower will be 20% let. Its oering seems to appeal to prospective tenants. As mentioned, McDermott is expanding, and Ronson says there is more than one viewing a day for the foreseeable future at the tower.

ANALYSIS

Location, location: Heron Tower is part of the prime City cluster and will be worth up to 700m when fully let to a multitude of occupiers

Rental high
The timing and quality of the building have helped achieved strong rental levels. Ronson is coy, but says Landmarks rent on the 17th to 19th oors began with a six and 55/sq ft has been achieved on other oors. Heron is not quoting rents for the upper oors, for which a Russian bank is understood to be close to making an oer. The location is important, of course, Ronson says. This is the best location in the City. The City has moved east over the past 20 years, towards Liverpool Street and Broadgate. Were the rst tower to go up in the cluster after the Gherkin. As soon as the idea of a cluster was discussed [by City of London head of planning

Peter Rees], we knew we should put a tower here. The next phase for Ronsons vision is the Heron Plaza, which has been designed by PLP Architecture and won planning consent last year. Heron will begin to plan nance for the scheme later this year, and begin development next year. When fully let, the 500m tower should be worth 600m-700m, Ronson says. Property is a long-term business, and you have to put your own money at risk to make the returns. Some people turned up thinking you could make 15% returns easily, but its not fee driven. Is this Ronsons proudest moment? Ive built 156 buildings across the world, and this has to be the best, but its a bit of an anticlimax to be honest, he says, pointing out a single screw missing from a stainless steel plate in the atrium. Ill only really feel 100% satisfaction when its completely nished, and only then when its fully let. 9

HERON TOWER TAKES FLIGHT

9 4,000 people will work in the building when it is fully let 9 1,000 people will ll its restaurants and bars at full capacity 9 There are 3,000 sq m of photo-voltaic cells on the southern facade 9 It is 230 metres high, just short of 1 Canada Square (246 metres) but taller than 30 St Mary Axe (195 metres) 9 There are 70,000 litres of water and 1,200 sh in the aquarium

PLETION
July 2002 John Prescott gives plans nal approval June 2003 Plan to build Heron Plaza revealed September 2005 Heron seeks permission for larger tower November 2006 Equity funding from Omani and Saudia Arabian investors secured March 2007 Eurohypo and Landesbank Hessen-Thringen agree to provide 370m debt package October 2007 Construction begins July 2009 Heron agrees deal with Four Seasons for Heron Plaza July 2010 First tenant McDermott Will & Emery March 2011 Tower completed and McDermott Will & Emery moves in

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ANALYSIS

Briefing
OBITUARY George Walker

Detail|Data|Policy|Events

9 Former professional boxer enjoyed highs and lows with Brent Cross, Trocadero and Brighton Marina
eorge Walker, who died on 22 March, aged 81, won 11 of his 14 professional light heavyweight ghts. In property terms, he was a heavyweight loser. Walker dominated the property world of the 1970s and 1980s, having made millions from buying and selling Brent Cross shopping centre in northwest London, Brighton Marina and the Trocadero, the entertainment complex in Piccadilly Circus. Heavy borrowing led to criminal charges of theft and false accounting in the 1980s, although Walker was acquitted. He bought Hendon Greyhound Stadium in 1974, and joined Hammerson in developing Brent Cross, north Londons rst covered shopping centre in 1976. He sold his share for a 3.7m prot in 1979. This rst property success gave his company its name, Brent Walker. In Brighton in 1985, he pioneered a mixed-use development after buying Brighton Marina with a cinema, an Asda, shops and ats. But Brightonians said Asda, which still trades, blocked the sea view, Trocadero to a joint venture between Brent Walker and an Irish dentist, Robin Power, three months later for 105m. Martin Clews, chairman of the Shopping Park Investors Forum, observed Walkers idiosyncratic style, during the heady days of the acquisition of the Trocadero. Clews, then a management surveyor at Weatherall Green & Smith, recalls: George would appear at all hours during the night. On the night we exchanged contracts, it was four oclock in the morning. George and I had been tying up stu, and I said: Im glad weve done that. I look forward to managing the property. He replied: Ive got some bad news. Were keeping [incumbent property manager] Debenham Tewson. I said: George, give me another chance. Ill see you tomorrow morning. Were both emotionally drained. I went round on the following morning and he had changed his mind.

Troc shock: George Walker (centre) sold Trocadero to Power (left) for 105m

and an attempt to create a factory outlet had limited appeal. Yet Walker called it an English Venice. The development helped to create 1.4bn of debt, and was sold by liquidators to local company Brunswick Developments in 1996. However, Walker was one of the few developers to make money out of the Trocadero, which he bought in 1987 from the Electricity Supply Nominees for 90m. The tenant was the waxworks of the Guinness World of Records. Walker sold the

OBITUARY Sir Frank Lampl

9 Lipton praises life-president of Bovis Lend Lease who survived concentration camps before defecting to UK

ir Frank Lampl, life-president of Bovis Lend Lease, who died on 23 March, survived the concentration camps of Auschwitz and Dachau, and slave labour in the BMW Munich factory, to rise to become a top UK contractor. Sir Frank, who was 85, did not abandon his native Czechoslovakia for the UK until the age of 42. In 1953, the Communists cancelled his prison sentence, served for being a bourgeois undesirable on the condition that he went into construction. Ten years later, he was managing director of Pozemni Stavby Zavod Opava. But when the Prague Spring withered in 1968 and the Russians invaded, Lampl defected to England, joining his son at Oxford University. He found work at Bovis in 1971, and four years later initiated its expansion into the Middle East. He joined the main board of the parent company, P&O, as chairman of Bovis Construction in 1985. Thus began a period when Sir Franks Bovis won tenders for many of the worlds great regeneration projects, among them Canary Wharf, Broadgate, Disneyland Paris, the Atlanta Olympics and the Petronas Towers in Kuala Lumpur.

Survivor: Lampls razor-sharp mind belied tough times

Sir Stuart Lipton, former chairman of Stanhope and now with Chelseld Partners, enjoyed a 25-year friendship with Lampl. If you had a problem, he would always oer a quiet chat. You would visit him at 127 Sloane Street, where you would have a charming interlude. He would talk about what he was doing at the time, and then get back to business very

rapidly. And he would always have a big smile. Whatever the problem was he said he would solve it. And he did. Lipton considers that Lampl hid his early horrors. You gradually got to know that there was something behind that accent, he says. He had been through incredibly tough times, but he would never mention a word. He was very reserved in terms of his past experience. He was well regarded as a builder, as a person and as an engineer. Paul Lewis, director of projects at Stanhope, recalls that Lampl was still much in command after he had sold Bovis to the Australian Lend Lease in 1999, and became life-president. Lewis and Sir Frank worked together on the successful private nance initiative bid to refurbish the Treasury, and to create accommodation within Revenue and Customs. He always understood the key points in any problem, says Lewis. And his people skills were inspiring. He was a complete gentleman. He had a razor-sharp mind. When you debated projects with him at an early stage, there was a lot of discussion that would begin with the words what if?"

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INTELLIGENCE Cushman & Wakeeld yields

Prime yields unchanged in March

rime yields were unchanged in March at 5.68%, which was 199 basis points higher than 10-year government bonds. Cushman & Wakeelds latest monthly update on the UK property investment market shows that prime yields in all 25 subsectors measured by the rm remained the same (table). The market has ended the rst quarter pretty much steady as she goes, said Cushmans head of European research David Hutchings. Demand is generally good and yields were unchanged in March, at least for prime space, but it remains very much an equity-led market. Activity has been somewhat less than hoped in parts of the market, but this is still largely down to a shortage of good-quality supply and a cautious attitude towards secondary particularly for retail, where distress is again evident from some occupiers. We can also blame the late and long Easter break for delaying some stock being put on the market and we expect an increase in activity in May and June. Markets have stabilised at yield levels last seen in the rst half of 2008. Interestingly, however, some sectors remain a long way from the highs they experienced before the onset of the credit crunch in 2007. Although London oce yields are just 62 basis points higher and shops are 114 basis points higher than their 2007 lows, national oces are at a 200 basis point premium, shopping centres 181 basis points higher and industrials 158 basis points higher.

Current prime yields

2007 low 2009 high Dec 2010 Feb 2011 Mar 2011 Change Future trend Shop units Prime central London Prime retail centres Large metropolitan cities Regional centres Strong market towns Smaller market towns Secondary retail Shopping centres Regional dominant Subregional Major urban centres Small urban centres Retail warehouses Shopping parks Open consent parks Bulky-goods parks Solus units Supermarkets Oces Prime London West End Prime London City Thames Valley Regional CBD: major cities Regional CBD: secondary cities Regional out of town Warehouse and industrial space Distribution warehouses Industrial estates: south-east Industrial estates: regional 4.00% 4.00% 4.00% 4.25% 4.50% 5.00% 5.25% 4.50% 4.75% 5.00% 5.50% 3.75% 3.75% 4.75% 4.50% 3.75% 3.50% 4.25% 4.75% 4.50% 4.75% 5.25% 5.00% 4.50% 5.00% 5.25% 6.00% 6.75% 6.75% 7.25% 7.50% 8.50% 7.00% 7.50% 8.50% 9.50% 7.00% 8.00% 9.25% 8.75% 6.00% 6.00% 6.50% 7.75% 7.50% 7.75% 9.00% 7.75% 8.00% 9.00% 4.00% 5.00% 5.25% 5.25% 5.75% 6.50% 7.50% 5.50% 6.50% 7.00% 8.00% 5.00% 5.25% 6.00% 6.25% 4.75% 4.00% 5.00% 6.25% 6.00% 6.75% 8.25% 6.25% 6.00% 7.00% 4.00% 4.75% 5.25% 5.25% 5.75% 6.50% 7.50% 5.50% 6.50% 7.00% 8.00% 5.00% 5.25% 6.00% 6.25% 4.75% 4.00% 5.00% 6.25% 6.00% 6.75% 8.25% 6.25% 6.00% 7.25% 4.00% 4.75% 5.25% 5.25% 5.75% 6.50% 7.50% 5.50% 6.50% 7.00% 8.00% 5.00% 5.25% 5.85% 6.25% 4.50% 4.00% 5.00% 6.25% 6.00% 6.75% 8.25% 6.25% 6.00% 7.25% -

SOURCE: CUSHMAN & WAKEFIELD

The data hub @

Shopping centre development pipeline

The last two years have seen a radical change in the opportunities for retail2012 of the UK banking crisis, combined led development. The stark consequences and beyo nd with falling capital values and consumer demand has had a profound effect.
to see greater activity Add to this the reluctance of banks to provide loan facilities usually two to three years and the recession shopping 2.7 million sq ft, which to In 2011 the total new space will be centres from owners of established centres effectively prevented of late 2008 / 2009 looking to expand commercial property, and in particular development, and we can the implementation of an improvement in supply. This is give the impression or extend. This of development type of any new centres. Trinity Leeds, which is less risky and the financial requiremen less onerous. have the recipe for stagnation. The recessionary environment an is being developed by Land is standing proudly anomaly as it is skewed by the 1.9 million sq ft Westfield We believe that ts Securities, centre extensions on its own for 2013 form the first phase could well has continued to have a dramatic impact on the UKs shopping with a September, which will in total Stratford City opening in development where construction of development deliver 1 million recovery during next few years. sq ft the recession. The only other developments the centre development pipeline. In 2010 the total additional floorspace in the commenced beforeof new and reconfigure retail centre of Leeds. d This is a of nearly 300,000 of an space built was 2.2 million sq ft; the lowest proportion of newexisting retailare Parkway Newbury major regeneration sq ft and Trinity Walk, area to provide Currently some the size and configuratio of shops that retailers Wakefield of 500,000 sq ft, which was started by Modus but 50 million sq ft of planned space for some 18 years. n need in todays shopping centres effectively on hold, market, which includes larger stores and construction stopped due to the company going into receivership. awaiting improveme is catering. nts in the economy retail property market and Construction recommenced following the purchase by Sovereign in order to achieve developme nt viability. Land / Area in a joint venture with the builder Sheppards and is now scheduled for completion in April 2011. The reason for the lack of new centres opening the recession. The in 2012 is clearly construction period for new is We are beginning

There are hundreds of reports available FREE TO SUBSCRIBERS go to propertyweek.com/data to search and download. New this week:

SHOPPING CENTRE LOPMENT DEVE PIPELINE

Chart 1: Shopping centre new floorspace, 2008 - 2013
Sq ft 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 3,000,000 2,000,000 1,000,000 0 2008 2009 2010

What are the cons equences

Without new prime retail space coming on stream retailers will not be able to grow their businesses as new floorspace is still the primary Parkway and Trinity Walk mechanism for retailers to achieve growth and profit. volume The department and anchor stores, which

for retailers?

need larger stores Westfield Stratford City formats to optimise their stringent expansion very criteria, will be virtually curtailed as the ability to create these large spaces is not available within existing shopping centres.

want more spac 5,000,000 e? pipe ent The line answer is yes. centre developm Despite the increase in VAT in January combined with shopping4,000,000 the Governmen
ts austerity measures public expenditure to reduce , retailers still want space in the primary towns and cities. Despite the growth of the internet, is a leisure pursuit retailing and consumers want the physical of merchandise presence and stores to fulfil their shopping needs. of new developme Lack nt, together with relatively high occupancy in the existing primary centres means that retailers will difficult to secure find it the quality of space they need in existing shopping centres.

Do retailers

2011

Retail demand is particularly acute for the major departmen store retailers and t the national multiples brands that need larger format stores to optimise their retail operations. demand has also Catering remained buoyant, with the public to see eating out continuing as an affordable luxury they are to relinquish. not prepared

All these retailers The most and of course This chart highlights the current and future position. In 2008 expand internationally optimistic predictions for 2014 show 1 million sq ft open towards online are looking for to look retailing as a growth more shops which opportunity. million sq ft in 2015.will reality these figures are and trading, and 3.4This In employ more people we saw some 8 million sq ft of new retail spacebenefit the come onto ultimately that will help the will retailers however, national and local economies grow. it will not improve optimistic as they rely vitality the market; in 2012 there is effectively nothing. of our town centres. The future Restricting the on a growing UK economy during the next the developme seriously curtail nt pipeline will these two years, which at present would appear to be uncertain. objectives with from 2012 onwards therefore is very bleak. being deflected to other countries. investment potentially

Given retailers need to grow their businesses forced to look at they will be alternative options. This may include to space on retail a switch warehouse parks, or for the more retail brands to established

2011

2012

The UK is also experiencing demand from the internationa retailers, looking l to 2013 expand into new markets. Such include well known retailers brands from the USA as Apple and Hollister, as well as more unusual names like Clas from Denmark and Ohlson Uniqlo from Japan.

In 2011 the total new space will be 2.7m sq ft, which can give the impression of an improvement in supply. This is an anomaly as it is skewed by the 1.9m sq ft Westeld Stratford City opening in September
Lunson Mitchenal Shopping Centre Development Pipeline 2011

shopping centre development pipeline 2011

shopping centre development pipeline 2011

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Brieng

EVENTS Velodrome Cycle Challenge

WHEEL GOOD FACTOR

he International Childcare Trust and Property Week have teamed up for the industrys second Velodrome Cycle Challenge. The event will take place on Friday 17 June at south Londons Herne Hill Velodrome and proceeds will go towards childrens rights in Asia and Africa. Races include the two-lap sprint; a points race; pursuit; sprint nals and a scratch race for the best all-rounder. Last years winners came from Edgerley Simpson Howe. CB Richard Ellis and Prupim, Cyril Leonard, Allsop, DTZ, Cushman & Wakeeld and Colliers International were among the other rms that took part. The cycling runs from 2 pm to 6 pm and prizes will be handed out at the Crown and Greyhound pub in Dulwich Village from 6.30 pm to 8 pm. Egan property Asset Management, Albemarle Syndicates and Aquilla Insurance sponsor the event. 9 To take part, call Holly Davies at International Childcare Trust on 020 7065 0975

Heavy medal: CB Richard Ellis (left) picked up prizes at last years event, where property industry cyclists whizzed around Herne Hill Velodrome (above)

The morning after @

Undie-performing assets
Dragons Den star Theo Paphitis launched his new lingerie brand, Boux Avenue, in a urry of models, acrobats and cocktails last Wednesday. The entrepreneur treated various members of the property industry to a party in at Sketch in Londons Mayfair to celebrate the opening of the rst six Boux Avenue stores at Capital Shopping Centres Traord Centre, Lakeside and St Davids shopping centres, as well as at Meadowhall, Buchanan Galleries and Bluewater.

All aboard the Property Network

Leigh Natasha Salter of Movers & Shakers has posted its next event: the Henley Festival of Music and Arts. To nd out how you can join the networking club on board the paddle steamer Southern Comfort, and relax with a glass of bubbly while listening to Bryn Terfel, visit the events section in the Property Network.

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MARKETS
Hampshire, Dorset + Wiltshire
42-43 Our Enterprise in Gosport, Highcross in Portsmouth, Terrace Hill in Dorset 46 British Land and USS, Wereldhave

Occupiers

48-49 The rst-ever CoreNet Global salary survey

EUROPE BASIC SALARY

Residential
50-51 Ocesto-residential conversions, increasing returns for the housing sector

Deals

120,974
TOTAL REMUNERATION

168,058
US BASIC SALARY

107,508
TOTAL REMUNERATION

160,770

55-57 Propertys latest deals, powered by David Adams Property Archive

AUSTRALIA AND NEW ZEALAND BASIC SALARY

110,606
TOTAL REMUNERATION

146,440

Hampshire, Dorset + Wiltshire

Council selects trio with views on Basingstoke
Shortlist drawn up of three to redevelop 20 acre site into oce-led scheme. Christine Eade reports

Basingstoke and Deane Borough Council has shortlisted Kier Property, John Laing and Muse Developments to redevelop Basing View. The 20 acre site, between Churchill Way East and the railway lines, accommodates predominantly redundant oces, stretching eastward from the town centre to the ring road. The winning partner will be chosen in September. The council has just begun to demolish two 1970s buildings on the site. The rst to be attened is City Wall House, where rst Sony and then the AA were tenants, before the motorists organisation surrendered its lease to the council and relocated to nearby Fanum House. Loddon House awaits a new demolition contractor after the one appointed ceased trading. The council has committed more than 10m to the development, including demolition costs. Simon Hope, strategic manager for the council, envisages an urban business park, made possible because Basing View is only a kilometre from the town centre. We will look to retain the freehold and grant long leases, he adds. This will be an oce-led, mixeduse development of 1m sq ft 60% oces. Basingstoke was a London overspill town in the 1960s, and consequently, more than 50 years ago, the council bought oce sites to create jobs for relocated Londoners. Today, the council owns 40% of the boroughs land and the rents from

the buildings on the land account for 15% of its income. Even though tenants have departed, many are still paying rent. Mars Pension Trustees paid the council 1m to surrender its long leases back to the council when its tenants had left. Andrew Newman, partner in local rm Hollis Hockley, explains: The big issue in Basingstoke is that there are long leases with ground rent, and the landlord is paying that ground rent based on rent receivable not rent received. Even if the building is vacant, the landlord might be paying 17% of rents receivable. This is an unacceptable form of tenure in the present economic climate. Newman, who is advising Laing, suggests that when Basing View is developed, those that have been granted long leases from the council to enable
Public packet: council has committed more than 10m to redevelopment of Basing View, which will not commence without a prelet

them to grant leases to tenants should pay the council 5%-10% of rents they actually receive. James Brounger, CB Richard Elliss south central region managing director, is advising the council and scrutinised 15 initial expressions of interest. He says development will not begin without an oce prelet. Last month Network Rail bought six of the eight acres on the north side of the railway lines, called the Gresley Road Triangle. The price remains undisclosed, but the council describes the deal as a 10m commitment. Network Rail will develop a training facility on the land and build a bridge over the railway line to the main site. Richard OBrien, route director for Wessex, says: We considered a number of locations and criteria and felt Basingstoke oered the best solution. 9

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Warring partners put Haslar hassle behind them

Redevelopment of former military hospital in Gosport can now proceed. Christine Eade reports

The Luftwae bombed the Royal Hospital Haslar at Gosport only twice, because its water tower was a navigational aid for attacking Portsmouth. Next week the owners of the former military hospital, which has treated the injured from every war since it opened in 1753, will reveal how it has avoided another conict. Social enterprise consultant Our Enterprise, which paid 4m to the Ministry of Defence in 2009 for the hospital, is expected to issue a statement to say that it is back on track working with its development partner, Harcourt Developments, after a disagreement that nearly led to litigation. The plan is to convert the 18th-century hospital into a veterans village for those wounded in recent conicts, and to make the development viable by developing new seaside ats for sale. The disagreement arose because Our Enterprise

questioned whether Harcourt had development funding. Harcourt threatened litigation, believing that it was being excluded from the scheme. Harcourt has already contributed 3m to early work. Pat Doherty, chairman of Dublin-based Harcourt, reveals: We were going to take them to court, but now they are talking sense. We are 50:50 partners. We prepared the bid document and we are the developers. But once our masterplan was accepted, they tried to push us out. Matthew Bell, a social entrepreneur who founded Our Enterprise, says: We are positive about Harcourts involvement. Pat is an experienced developer and I like him. The litigation was a way of asking: Are we serious or are we just playing? Both sides pay tribute to the conciliatory gure of Andrew Parker Bowles, former husband of the Duchess of Cornwall and Harcourt non-executive director. Last year, he was appointed chairman of

Restorative surgery: the hospitals pathology lab will become care home (left) and the water tower (above) will be used for oces

Lakeside letting leads out-of-town oces charge

Until the beginning of this year, Lakeside 1000 on North Harbour near Portsmouth had attracted few tenants. But in January, the Southern Co-Operative led the way for a number of lettings that will take place later this year. The letting agent for Highcrosss 250,000 sq ft oce building, Russell Mogridge, director of Hughes Ellard, predicts that this one building will account for half the oce lettings in the Solent corridor. Southern Co-Operative, having outgrown its oces in Fareham, has taken a new 15-year lease on the top oor of 16,500 sq ft at Lakeside 1000. The rent is 15/sq ft with an undisclosed rent-free period. Mogridge reveals: There is a 60,000 sq ft deal about to complete and a further three totalling 20,000 sq ft. It has been a long haul for Highcross, the fund manager, which bought 100 acres of the North Shore on junction 12 of the M27 in 2005 from IBM, which remained on the park, downsizing and becoming Highcrosss tenant. Highcross refurbished Lakeside 1000 in 2008, but only this year has this borne fruit. The Co-Op letting demonstrates that out-oftown oces around the M27 are outstripping the Southampton city centre letting market. In January, solicitor Lamport Bassitt became the second law rm to move into McAleer & Rushes Charlotte Place in the city centre. Lamports senior partner, Sean Kelly, refuses to conrm that his rm is paying only 12.50/ sq ft. In 2009 solicitor Berryman Lace Mawer paid 17.50/sq ft to lease the same building. Research from CB Richard Elliss Southampton oce reveals that in the second half of last year, six deals in the city centre accounted for 66,500 sq ft. Nearly half was to a serviced oce provider in the Ocean Village Innovation Centre. 9

Clear water: letting to Co-Op at Lakeside 1000 near Portsmouth shows that out-of-town parks are outperforming city centre market

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Hampshire, Dorset + Wiltshire

MARKETS

IN BRIEF
Forthcoming Farnborough icks
Our Enterprise, thus bringing both sides together. He has been brilliant, says Bell. He has been passionate about what we are trying to achieve. An anonymous benefactor gave Our Enterprise the purchase price, and, because he was a friend of Doherty, recommended Harcourt. Its most notable UK historic restoration is the conversion of Belfasts shipyards into the Titanic Quarter, a mixture of oce and educational space. The MoD accepted Our Enterprises oer with the promise of further payments once the development was completed. Our Enterprise bought 807,300 sq ft of mainly listed buildings set in 240 acres. Harcourt will demolish the 1970s buildings, and when the new ats are developed, Haslar could cover 1m sq ft. The MoDs overage will be based on this increase in space. Our Enterprise has appointed Re-format to carry out a conservation management plan, while Doherty has appointed his Titanic architect, Bernard Parker, principal of London-based Heber-Percy Parker. Parker says: We had to make it viable, while respecting the existing buildings. The hospital, built on three sides of a square, will be a young veterans home, and nanced by a charity. The early 20th-century pathology laboratory will become a care home. The water tower will become oces, because, as Parker points out, no one wanted to live below the listed water tanks. 9
Vue, the cinema operator, is negotiating to become the anchor tenant in the second phase of St Modwens redevelopment of Farnborough town centre. Both are now in discussion with Rushmoor Borough Council on reconguring plans to accommodate a multiplex. The council is also talking to Thames Valley Housing Association about operating the residential element above the 62,000 sq ft Sainsburys that is part of the rst phase of the development.

Waitrose parades in Chippenham

Waitrose opens in the Borough Parade, Chippenham (pictured), next Thursday, having taken a 15-year lease from Jeeves Investments, a joint venture between AEW Europe and Mountgrange. Jeeves plans to spend 250,000 on new signs and a glazed canopy above the listed entrance of Borough Parade.

Lidl hopes Adanac plan is not discounted Salisbury solicitors wait for court hearing
Salisbury has sealed its largest-ever oce prelet, after a rm of solicitors leased the entire 30,000 sq ft redundant magistrates court in Exeter Road, near the city centre. The Romsey Management Company paid 1m two years ago to the Court Service for the 1950s building. Romsey has applied to Wiltshire Council for a change of use to oces and a decision is expected this summer. Nik Cox, a director of Hughes Ellard, who acted for Romsey, says: Only a small part of the building is a court , as it is part of a much larger area. It would work quite well as open-plan oce space. The building has a varied history, having been an ocers mess, a dance hall and the oces of the Inland Revenue. The court relocated to Wilton Road in the city in 2009. 9

Dorset dials up largest shed deal for 15 years

Kondor, the distributor of mobile phone accessories, took possession on Monday of its 5m, 59,740 sq ft warehouse on Terrace Hills Christchurch Business Park (pictured). Terrace Hills agent, Matthew Poplett, a partner in King Sturges Southampton oce, says that this is the largest warehouse deal in Dorset for 15 years. Terrace Hill is developing speculatively the park of 20 warehouses totalling 52,625 sq ft. Six have already been presold at prices that range from 125/sq ft to 135/sq ft. Terrace Hill director Nigel Wakeeld says he has received several enquiries from buyers because there is no other speculative industrial development in the area. Goadsby is joint agent on the park. 9

The Ordnance Survey relocated to Adanac Park, Southampton, this year. Prospective neighbours still await the decision of local planning authorities and the outcome of a planning appeal. Lidl will submit a planning application this summer for a 484,380 sq ft depot set in 25 acres by the M271, south of Brownhill Way, Nursling. In December, the German discount supermarket exchanged contracts with the landowner, Barker-Mill Estates, a family trust. Lidl chose the site after the Say No To Lidl Campaign drove it from 32 acres at Wade Park Farm, Ower, on the M27. The Brownhill Way site straddles the authorities of Test Valley and Southampton. Barker-Mills agent, Andrew Archibald, director of Keygrove Chartered Surveyors, says that the Southampton borough, on which 40% of the land stands, is strongly in favour of Lidls scheme. Circle Health, a private hospital chain, will appeal against Test Valleys February decision that Adanac did not need a hospital. 9

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Whiteley owners fresh outlet

Failed discount scheme to be replaced by shopping park. Christine Eade reports
Whiteley Village, Hampshires failed factory outlet, is to be replaced by a shopping centre of 240,000 sq ft of shops and 50,000 sq ft of restaurants, banks and other ancillary uses. In February, Winchester City Council granted Whiteleys joint owners, British Land and Universities Superannuation Scheme, planning consent. Many of the outlet shops on junction 9 of the M27 are still trading. But because factory outlet leases are generally short, USS and British Land will have little trouble or expense in taking back the shops and demolishing the brick facades and gable roofs. Ben Grose, British Lands head of retail asset management, says: A number of high street multiples have expressed an interest. The feedback from retailers is that there is a lack of supply in the pipeline. He refuses to comment on the rumours that BHS wants one of the proposed 60 stores. House of Fraser may also take space for one of the smallerformat stores that it launched in 2007. Grose reects: Whiteley Village opened in 1999, and as Gunwharf Quays [in Portsmouth] evolved with its additional leisure, Whiteley Village struggled to keep up the pace. USS and Swan Hill opened what they claimed was Hampshires Bicester Village or Cheshire Oaks in November 1999, even though only 20 of the 50 units were let. A year later, Whitely was eclipsed by the Berkeley Groups Gunwharf, now owned by Land Securities, which opened with a cinema and a bowling alley in addition to discount designer clothes. Whiteleys only other attraction was a 35,000 sq ft Tesco, which will continue trading and be incorporated into the new scheme. In 2007 British Land bought a half share of Whiteley, including Tesco. Now both will fund redevelopment from their own resources. What they have not decided on yet is a new name for the centre with a troubled past. 9

Wereldhaves Dolphin-friendly revamp

Retailers in Pooles Dolphin Shopping Centre have begun to notice the changes to their environment being carried out by new landlord Wereldhave. The Netherlands company bought the 530,000 sq ft centre from Grosvenor in December for 85m leading to a 6% yield. Wereldhaves rst task will be the installation of double-height shop windows to give the 1984-built former Arndale centre the appearance of a modern shopping centre. It will then recongure the escalator system of the two-level mall, and improve the lighting and ooring. Andrew Turton, managing director of Wereldhave Property Management, says: Since our purchase of the Dolphin centre, we have highlighted numerous ways in which we can unlock its potential. We aim to vastly improve and modernise the centre, thereby broadening the appeal to attract retailers and to draw upon the untapped wealthy local population. The centre has 100 shops, among them Marks & Spencer, Primark, BHS, New Look and Boots. Wereldhave has reappointed Lunson Mitchenall as letting agent and appointed architect Leslie Jones to devise tenant mix and asset management strategies. 9

Bournemouth gives Imax turkey the chop

Bournemouth borough councillors have always hated that their Waterfront building was called the Imax, especially as no such lm has been shown in the centre for six years. So last month they turned up to make it a public event when a workman removed the sign in preparation for the lowering of the height of the building. Council leader, Peter Charon, says that chopping the building down to size will improve residents sea views. Next month is the deadline for those with ideas for the future of the truncated building to communicate their thoughts to the council. By September, the council as freeholder hopes to have granted a lease to the operator who comes up with the best idea for the Waterfront. The t-out having been completed, the council hopes that the public will throng back in the summer of 2012 and the word Imax will never be heard in Bournemouth again. 9

Poole attendants: new owners will replace windows, lighting and ooring and recongure escalators

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Occupiers

Retailers|Corporates|Industrial|Leisure

WAGE REVELATIONS
European executives are best paid, a Corenet Global survey shows. Aditi Shah reports

Manufacturing pays the best basic wage ()

The average renumeration worldwide for a head of corporate real estate was 136,504 in 2010, a CoreNet Global Compensation survey reveals. The survey is the rst of its kind to be completed specically for corporate real estate teams and included information from 275 companies across the globe. Europe compensated its property heads best, and paid them an average of 168,058 after bonuses and long-term incentives such as company shares. In terms of sector, technology paid their real estate executives the highest an average total of 188,615. The survey interviewed professionals from companies that lease or own property in industries including nancial services, technology, retail and manufacturing. Standard Chartered Bank, PepsiCo, and Hilton Worldwide were among the companies surveyed. The research was carried out by CoreNet Global and FPL Associates. 9

Manufacturing/industrial Technology Telecommunications Education/research Financial services Business services/consulting Consumer products/retail
0 25,000 50,000 75,000 100,000

127,241 117,933 111,866 111,496 105,796 100,471 98,253

125,000 150,000 175,000 200,000

Those in the manufacturing sector earned the highest basic pay by more than 10,000. This is possibly because they moved across from non-property departments, such as nance jobs, which command higher fees (box, right). By contrast, those in the property departments of the nancial services sector earned 21,000 less than their peers in manufacturing in 2010.

but technology comes top after bonuses ()

Key: 9 Basic wage 9 Bonus
Technology Manufacturing/industrial Financial services Consumer products/retail Telecommunications Education/research Business services/consulting
0 25,000 50,000

Execs bullish for 2011 bonuses (%)

50

127,241 117,933 111,866 111,496 105,796 100,471 98,253

75,000 100,000

61,374 44,513 49,921 46,632 46,370 33,345 34,344

125,000 150,000 175,000

188,615
40

162,446 161,787 158,128

20 30

133,816 132,597

10

0
200,000

2010 compared with 2009 (actual)

Increase

152,226

2011 compared with 2010 (projected)

Twenty-nine per cent of professionals received a decrease in their annual bonus compared with 2009. This number is expected to drop to 10% in 2010, as improved company performance results in higher payouts. This has also caused 41% of professionals surveyed to expect a higher bonus, although 41% expect the same as last year.

Did not receive/do not anticipate receiving

No change

Ninety per cent of participants were eligible to receive a cash bonus, but the performance of corporate real estate departments had little inuence on determining bonus amounts. Instead, company performance had the largest impact on determining incentives. The technology sector oers the best remuneration packages at more than 60,000, almost double the bonuses paid in education and research and business services and consulting.

Salary surveys @
Access an interactive version of this article at propertyweek.com/ occupiersalarysurvey. You can use it to compare your salary with others in the corporate real estate sector.

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Decrease

Did not receive/do not anticipate receiving

No change

Decrease

Increase

propertyweek.com

PHOTOGRAPH: GAGILAS

Salary survey
European wages top the US and Australia

MARKETS

EUROPE BASIC SALARY

120,974
TOTAL REMUNERATION

168,058
US BASIC SALARY

107,508
TOTAL REMUNERATION

160,770

When it comes to base salaries and incentives, European professionals are better paid than their peers in the US and Australia. European corporate real estate professionals earn an annual base salary of 121,214 9.3% higher than Australians and Kiwis and 12.5% higher than in the US. However, American professionals receive the highest bonuses, at 53,425 a year, making their total pay higher than their Australian counterparts. Despite an average incentive of only 47,213 a year, Europeans are the best paid in the business.

AUSTRALIA AND NEW ZEALAND BASIC SALARY

110,606
TOTAL REMUNERATION

146,440

What this says about the property industry

Corporate real estate roles do not always attract the best people in the market. This is changing as companies realise the importance of property, not only as an asset, but as a cost that needs to be minimised. There is still a shortage of talent when it comes to corporate real estate roles and this will get worse as we come out of the recession. This is because fewer people have got jobs after coming out of university, which means there has not been an inux of people into the industry. Also, when people decide on a career in property they tend to go for a company that is property focused, rather than taking a job as a real estate professional in a retail company. Martin Meech, group property director, Travis Perkins
Corporate real estate represents a substantial and crucial operational asset, and an equally substantial nancial cost and liability for many businesses. The scale and prole of the corporate real estate executive role will become even clearer with the transparency required by the proposed changes to lease accounting rules. Companies need to value real estate roles in relation to the nancial importance of their portfolio. Many in-house real estate functions are now highly slimmed-down, informed client teams, managing extensive outsourced services. These can be complex business models and the real estate role should be measured on that basis. Martin Laws, partner in corporate real estate, Drivers Jonas Deloitte

Corporate real estate in manufacturing companies is often run by executives who have come up through the ranks in other disciplines. Their salary may reect their previous discipline, as well as the scope and scale of the portfolio. In a large rm they may have been chief nancial ocer at a medium-sized subsidiary before moving over to head up real estate and facilities. It is reasonable to expect they might earn more than a lifer in real estate, who runs a portfolio of oces for an insurance company. Julian Lyons, member of the RICS Corporate Occupier Group

9 What do you think? Send your thoughts to letters@propertyweek.com

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MARKETS

Residential
Conversion could ease vacancy rates and feed demand for residential. Doug Morrison reports
Chancellor George Osbornes Budget plans to make it easier for landlords to convert commercial properties to residential is one initiative where government seems to be in step with the market. Just as Osborne announced to the Commons last month that the proposal will go to consultation, Mike Husseys Almacantar exchanged contracts to buy Londons Centre Point oce tower on Tottenham Court Road for 120m. Almacantar declared plans for intensive asset management of the 33-storey tower, as well as the possibility of converting some of the oors to residential. Centre Point is 15% vacant. The trend for such conversions dates back many years (box, below) and it is likely to remain an option for developers in central London given the continuing strength of the prime residential market and the fragility of the commercial property market. Data prepared for Property Week by CB Richard Ellis show up to 815,000 sq ft of vacant oces in Belgravia, Knightsbridge, St Jamess and north of Oxford Street (table). Residential conversion could generate total prots of 160.76m. CBRE omits grade A oces and Mayfair altogether. The blanket gures take no account of localised supply and demand. It may not be appropriate to convert some oces. Indeed,

Investment|Regeneration|Management

More converts for oces to residential

Up to 815,000 sq ft of convertible oces in four areas of central London
Belgravia Oces eligible for conversion Value as oces Value as residential 95,500 sq ft 73.15m 166.9m (159m private) (7.8m aordable) 139.1m 27.8m Knightsbridge 33,000 sqft 25.41m 57.9m (55.3m) (2.7m) 48.3m 9.66m North of Oxford Street 453,000 sq ft 301.8m 409.3m (379.4m) (29.8m) 341m 68.2m St Jamess 234,000 sq ft 358m 330.5m (313.6m) (16.9m) 275m 55.1m
SOURCE: CB RICHARD ELLIS

Less conversion costs* Prot on conversion

* including acquisition and construction costs, professional, marketing, sales and nance fees

CBRE calculates that the vacant stock in St Jamess remains more valuable as oces than residential. But overall, the gures demonstrate the potential nancial gains from conversion. CBREs analysis also lends weight to a study published last November by West End agent H2SO, which revealed that between 2001 and 2009 4m sq ft of oces under the Westminster planning authority were converted to other uses, mainly residential. H2SOs report identied a further 1.8m sq ft of applications with Westminster City Council involving proposed conversions. At the time H2SO partner Paul Smith observed: While on the face of it this apparent loss of stock might appear to be bad news for the West End oce market, it should actually be welcomed as it repositions a whole raft of [period] buildings back

to their appropriate use, brings new life to them and also funnels demand to the oce buildings that work best for contemporary occupiers. Whether the Budget announcement adds impetus to the existing demand for conversions remains to be seen. Mark Belsham, director at Hargreaves Newberry Gyngell, has advised on numerous conversions. He believes the impact would be greatest in boroughs such as Lambeth, which have favoured employment uses over residential development. In the West End, theres good demand for oces and for residential equally, and so market forces will prevail, says Belsham. I do see it as very good for the fringe markets where there isnt such strong demand for oces and theres an oversupply of redundant buildings. 9 A longer version of this article can be read at propertyweek.com/residential

Conversion: a recession trend

Oce-to-residential conversions have been around for as long as property owners have sought to maximise prots from their buildings. But in the modern age, the trend took o in the early-1990s recession. In 1992 the late Geo Marsh, founder of London Residential Research, spotted the opportunity to convert obsolete commercial buildings into housing following a collapse in London oce values. It took a while before Marsh was taken seriously. As he said at the time, the turning point was Regalians acquisition of Peninsula Heights on the Albert Embankment. Regalian transformed a 1960s oce block into luxury ats, which sold for 1m apiece to buyers such as Lord Archer (left). Soon afterwards Manhattan Loft Corporation made its name and bumper prots from converting former industrial buildings in Clerkenwell into loft apartments. By the late 1990s and the onset of the last housing boom thousands of homes had been created in central London and city living had spread to Manchester and Leeds.

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ARCHER PHOTOGRAPH: GAUTIER DEBLONDE

Residential

MARKETS

Managers: take a stand on your brand

Residential property management needs to become more of a branded service and incorporate some of the successful marketing ideas commonly used in both the US rental market and student accommodation sector. That was the message from Grainger director Nick Jopling (left), who was a keynote speaker last week at Property Weeks residential management conference, Increasing Returns for the Housing Sector. The event was held at the London Midtown oce of law rm Speechly Bircham. Jopling described property management as the beating heart of Grainger, which is the UKs largest residential landlord and employs 110 people half the workforce in its management business. But he also hailed Pinnacle Capital the US group whose eponymous schemes have 96% occupancy and whose operation is sophisticated enough to identify how many properties are available on any given day. This is way beyond what we do [in the UK] but they can do it there because its a much more homogenised product, he said. Jopling said Londons 1,439-unit Olympic Village and accompanying development land oered the scale and opportunity to introduce US-style branding. Both Grainger and Pinnacle are bidding for the village, which the Olympic Delivery Authority will sell for housing following the 2012 games. Lessons can also be learned from student accommodation. Jopling cited the example of UK provider Unite. They provide an owner-manager solution and they brand it, he said. We all know what Unite is and institutional investors invest in it, and on a keener yield than most commercial property except for prime London. 9

London leaseholders lose out in management

Thousands of residential leaseholders in central But it is often the case that the individual at London risk losing money by failing to exercise owners dont receive the value they deserve. These their right to manage their apartment blocks, leaseholders are in a position where they can initiate claims surveying rm Ringley. a change and save thousands of pounds a year, Following an analysis of the ownership of 3,375 simply by increasing their involvement in the ats across 15 inner London postcodes, management of their building. Ringley reveals that just 9.5% of Ringley helped residents in Hertford residential blocks are self-managed Lock House, 201 Parnell Road, Tower where leaseholders can control Hamlets, east London (pictured), to the amount of service charge and set up a management company. how it is spent. Bowring expects more will Leaseholders have been able follow as service charges come to take over block management under scrutiny amid tough through enfranchisement since economic times. 2002. But Ringleys survey Peverel, the Vincent highlights a huge concentration Tchenguiz-owned housing of control still in the hands of a management group that was Self-help: Bowring assisted few estates, institutions and placed into administration last with residents management overseas owners. month, has come in for increasing company at Hertford Lock Ringley suggests that Londons criticism from its leaseholders over House in east London (above) leaseholders are either apathetic service charges. or unaware of the nancial But Peverels head of benets of their right to manage, commercial Andrew Fildes despite paying higher service charges than told Property Weeks property management elsewhere in the UK. conference last week in London: Leaseholders Managing director Mary-Anne Bowring claims: have a responsibility to understand their obligations Wealthy institutional, overseas and famous estate under the lease before purchase. freeholders in prime central London are making big People often make property decisions while they prots by charging a premium for management are under both emotional and time pressures. As a services, undertaking all too frequent upgrading of result, questions such as, what will my service common parts and by marking up costs such as charge obligations be?, or who is the managing buildings insurance. agent? never get asked. 9

Residential @

To read our full coverage of residential news and comment, as well as information on forthcoming conferences, visit propertyweek.com/residential

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PROFESSIONAL

Public sector
Local authorities must give reasons before rejecting plans. Richard Heap reports

Councils|Government|Agencies

Locals will race to challenge councils after Newmarket case

Local authorities must set out reasons why they have rejected certain options when drawing up local plans, says the High Court. On 25 March, the court published its judgment in the case brought by seven companies and other bodies in the horse racing industry against Forest Heath District Councils plans for Newmarket. The council set out plans in its core strategy for an urban extension in the town for 1,200 homes to be built over 20 years on land owned by Lord Derby, Edward Stanley. Save Historic Newmarket claimed the plan would damage horseracing in the town (box, right). The court found the council had not taken into account European Union directive 2001/42/ EC, which was adopted on 12 May 2010, when planning its core strategy. Lord Derby will appeal against the decision in June. The EU directive aims to contribute to the integration of environmental considerations into the preparation and adoption of plans and programmes with a view to permitting sustainable development. The court held that the council had failed to set out alternatives to its preferred plan in its core strategy and reasons why it would not proceed with those options. It found that the councils environmental report that accompanied the core strategy did not give consultees reasons for rejecting alternative plans for the proposed development. Stuart Andrews, head of planning at law rm Eversheds, says this is the rst challenge to consider whether a core strategy has been considered in line with the strategic environmental assessment. The actual decision and its impact is quite broad, he says. It should make local authorities be concerned about whether they have considered alternative strategies eectively. This is the rst in what could be a series of challenges. The council said in a statement that it was disappointed with the ruling, as the local development framework that included the disputed core strategy represents ve years of hard work and consultation. 9

Newmarkets racing form

Seven horseracing bodies took action against Forest Heath District Council: Save Historic Newmarket, auctioneer Tattersalls, Unex Group Holdings, Jockey Club Estates, Newmarket Trainers Foundation, Godolphin Management Company and Darley Stud Management Company. The rst recorded race at Newmarket was on 18 March 1622, and in 1660 horse-racing fan Charles II started to visit the town. In 1665, he brought in an act of parliament for the rst-ever race run under written rules, which happened in 1666. Charles II rode his own horse to victory in this race, the Town Plate, in 1671. In 1750, the Jockey Club formed in Newmarket to oversee and control horseracing in England. Fixed annual races started in Newmarket in the 1760s, and the rst classic of the British season the 2,000 Guineas was inaugurated in Newmarket in 1809. It was also the only British racecourse to stage racing during World Wars I and II, and held the rst race to be decided by a photo nish, in 1949.

PHOTOGRAPH: NIZAM UDDIN

Flat out: court found Save Historic Newmarket was not given reasons why council opted for alternative plans, which the protestors claim could have damaged horseracing in town

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Public sector

PROFESSIONAL

Report proposes business rate buyouts

The government published terms of reference for its local government resource review into reforming business rates last month, after two months of delay. The review is due to conclude in July, and is seeking proposals for how to reform the system. Local government thinktank Localis last week weighed into the debate with its report with Ernst & Young, the Rate Escape. Localis has proposed a buyout model that would allow local authorities to buy their way out of the existing grant system. The buyout model works on the principle that any council that believes it can increase the amount of business rates it takes in its area should have an incentive to do so. The council would tell the Treasury that it wants to buy its way out of the rating system, and agree a buyout fee. This fee would go to the Treasury for redistribution to poorer councils, and the council would retain its locally collected rates. Of 195 council leaders questioned by the parties, 61.8% said that local autonomy over business rates was more important than equalisation, which would redistribute rates (graph 1). And 42.6% of leaders said a council could have an impact on the local economy (graph 2). Three-quarters said more nancial incentives would make them innovative. 9
1 What is more important for local government nance: central equalisation or local autonomy?
Equalisation much more important Equalisation slightly more important 3.5% 5.4% Local autonomy much more important 35.1%

Need to know: enterprise zone timetable

The government has published its enterprise zone prospectus, which sets out details for the 21 enterprise zones announced in the Budget. Local enterprise partnerships (LEPs) will run the zones, which have streamlined planning powers and business rates discounts. Areas for 11 zones were announced in the Budget, and LEPs will be invited to start bidding to host one of the 10 remaining zones by the end of June. Here are the full timetables for the rst and second waves of the zones:

THE FIRST WAVE

23 March 2011 Government announces 11 local enterprise partnerships to host the zones. They are: Birmingham and Solihull, Leeds, Sheeld, Liverpool, Greater Manchester, West of England, Tees Valley, North Eastern, Black Country, Derbyshire and Nottinghamshire, and London

THE SECOND WAVE

End of April 2011 Other local enterprise partnerships to give short expressions of interest in setting up a local enterprise zone

Mid-April 2011 All partnerships to be invited to government workshop on enterprise zones 24 March 2011 Specic sites for four zones announced: Londons Royal Docks, the Boots campus in Nottingham, Peel Groups Liverpool Waters (pictured) and Manchester airport May 2011 Government to write to all partnerships who have submitted expressions of interest that set out the March to summer 2011 Government to work with the rst 11 local zones to agree details such as specic sites and policy packages. Powers to include faster planning processes and business rates incentives in Black Country, Derbyshire and Nottinghamshire, and London May to end of June 2011 Local enterprise partnerships to develop and submit proposals criteria against which bids would be assessed

Late March/early April 2011 Government workshop for 11 local enterprise partnerships July 2011 Government to assess proposals against these criteria, before announcing successful bids May 2011 Once the site specics are agreed, local planning authorities will start establishing local development orders to create simplied October 2011 to March 2012 Planning authorities to establish local development zones and government will work with successful
SOURCE: LOCALIS

Both equally important 26.7%

Local autonomy slightly more important 26.7%

planning zones

partnerships to agree the specic package By April 2012 Local authorities will have the power to discount business rates for specic businesses in individual enterprise zones required to address local economic challenges 9

2 To what extent can a council impact on the local economy? Not at all 0.5%
A small amount 15.3% A large amount 42.6%

By April 2013 New funding arrangements to be available to local authorities that allow them to retain business rates and use taxincrement nance
PHOTOGRAPH: MOZ278

A moderate amount 41.6%

SOURCE: LOCALIS

Public sector @
Read Localiss Rate Escape report at propertyweek.com/professional Download the enterprise zone prospectus at propertyweek.com/professional

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PROFESSIONAL

Workplace
My big move: West End to east
Mark Coxon tells Aditi Shah why he swapped Cushman for Caxtons After working in Londons West End for nearly 15 years, nine of them as a partner at Cushman & Wakeeld, I decided to make the move to cover the east of the M25 as an industrial agent at Caxtons. My patch stretches from Beckton to Tilbury (pictured), taking in the London Gateway, and from Charlton to the M25 and Kent. Since joining the 20-year-old rm in 2009, I have already been instructed by pension funds and developers on 50 acres of industrial land. The transition was not dicult. The dierence is that a big rm has a larger network of people to bring in work, whereas in a smaller agency, you eat what you kill. So you have to go out and get instructions. This is why I work four days in the oce and spend one day networking with pension funds, developers and other agents in the West End. I continue to go to as many corporate events as I did back in the day because you have to be seen to make your mark. My USP is that having worked with large

Careers|Management|Moves
Twitter @

PHOTOGRAPH: BRIANFULLER3685

pension funds and property companies in the past, I have a good idea of what theyre looking for. Looking at the big picture is essential this is something I learned in the West End from working with international clients that have properties in London. Having a regional focus gives me more time to get to know the local occupiers and area this makes people sit up and listen. And, also, working in a regional oce, you dont tend to have as many distractions as you ould in the West End, which is always buzzing. It lets you put your head down and get work done. I still live in Clapham, south London, and commute to Kent, and although I spend one day a week in London I occasionally miss popping around the corner for a pint and seeing agents from the other rms in the pub. 9 Mark Coxon is a director at Caxtons

Follow all our writers on Twitter for up-to-the-minute news and comment. You can also join the Property Week groups on Facebook and LinkedIn @RichHeap Government guidance on the Bribery Act says hospitality wont be hit, if its reasonable. Whatever that means @hatcherdavid Met grad working at esteemed Brum agency last night. Had been working for free while nishing his masters. Not bad tactic if aordable @PWNickJohnstone Mark Swallow big name in Brums property circles quits Knight Frank http://bit.ly/i0CSct @PWDavidDoyle The dangers of email ... Though more shocking for me is his mates cheek in asking if he can cop o with his ex! http://ow.ly/4otkj You can also get the latest job vacancies by following @pw4jobs

Take ve ... tips for interviewing for senior sta

Mark Bailey, director of service delivery at recruitment rm Holtby Turner gives his top ve tips for interviewing senior executives.

2 3

Intelligence test

Competency questioning is a common and valuable technique for conrming a candidates skills. Think of what your role will require business development, restructuring a division, commercial acumen, innovative business practices and ask the person to give specic examples of when they have done something similar. Do not just accept their answer: keep probing to nd out exactly how they achieved the result.

Master questions

Verifying a persons experience is relatively straightforward, but it is also essential to assess their intelligence and personality to make sure they can cope with the demands of the role and will be a good cultural t with your organisation.

Sell yourself

The best people are likely to be in a rewarding job already and they will need to be convinced that you have the right role for them. Dont just treat them like an applicant: you need to sell your company and the opportunity to them. Very few people move just for money it is the long-term prospects and the inuence they will have within the business that are likely to be more important. Find out what motivates them and demonstrate how your opportunity can help them achieve their aims.

The interview is only part of the process. As soon as you have identied the candidate, start to build a relationship to strengthen their commitment. Get them to meet their peers informally, attend a strategy day or whatever is appropriate. Keep in regular contact and give them a feeling of personal involvement with your business. This will help them through the tricky stage of the resignation process, where they are likely to be put under a lot of pressure to not leave their employer.

Take it personally

Time management

The decision-making process for recruiting senior executives can be long-winded, but it is important to keep momentum going. Let the person know the process and timescale, keep the number of interviews manageable (three formal interviews should be ample), provide prompt feedback and move to the next step as quickly as possible. 9

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PROFESSIONAL

People

GOING PLACES This weeks movers

Savills has hired Florence Leibovitch-Neu from BNP Paribas Real Estate as a director in its French valuation department in Paris. Sarah Bate has joined Mayfair Capital Investment Management as director of research from Rockspring Property Investment Managers. James Feilden joins from GVA as assistant asset manager. Universities Superannuation Scheme has hired Tim Con as its evironmental manager. He previously held senior positions at WSP Environmental and SKM Enviros. LionHeart is looking for a CEO to succeed Mike Carter, who is retiring in August after 20 years at the helm of the chartered surveyors benevolent fund. Aberdeen Asset Management Asia has recruited Christiaan van Beek from CB Richard Ellis as a senior property investment specialist, to be based in its Singapore headquarters. John Cottrel has joined Nathaniel Licheld & Partners in Cardi from the Homes and Communities Agency as director. Chris Harrison is promoted to director in Newcastle. Cordea Savills has appointed Alexandra McGhee, formerly of Protego Real Estate Investors, as head of fund nance, UK, with responsibility for the nancial control and reporting on funds administered from London, Stockholm and Luxembourg. It has also appointed Nick Hayward from JP Morgan Asset Management as director of institutional business. Richard Susskind & Co has hired two surveyors: Lauren Leach in its retail and leisure department and Daniel Cohen (left) in the oce agency team. George Aase has joined PointPark Properties from Swiss company Zblin Immobilien as chief nancial ocer, replacing James Riddell, who retired at the end of 2010. The Crown Estate has hired two asset managers. Katie Rae joins the regional portfolio team from Invesco Real Estate and Charles Copper from Grosvenor joins the residential team. Orega has hired Mandy Holton and Alison Brady (left) as national sales oce co-ordinator and representative respectively. Women in Property has appointed Georgina Tibbs, a town planning consultant at Barton Willmores Bristol oce, as chairman of its south-west branch. Skelton Group Investments has promoted Graham Willson to its board. CVS has made four appointments: Helen Edwards from Gerald Eve and Peter Constable from Lambert Smith Hampton join as a senior surveyors, Michael Hampton-Riddington from BNP Paribas Real Estate as an associate director and Tony Eden from the Valuation Oce Agency as a senior consultant. CB Richard Ellis has promoted two members of its Bristol property and asset management team. Michael Ware (left) becomes senior director with responsibility for the south-west, Wales and the Midlands, and Peter Craske becomes senior surveyor. Wilkinson Williams has strengthened its investment team with the hiring of surveyor Graham Lind from Jones Lang LaSalle. Investment Property Forum has appointed Pam Craddock from GE Capital Real Estate as its research director. James Williams has moved from DTZs business space investment team to its shopping centre investment team as director in retail investment. Knight Frank has expanded its Yorkshire oce agency team with the appointment of Elizabeth Ridler as a partner after her two-year break from property. Meghraj Properties has promoted Justin Wood to director, responsible for investment in the UK and Denmark.
Please send all press releases to the professional editor at Property Week, Ludgate House, 245 Blackfriars Road, London SE1 9UY or email people@ propertyweek.com

Contacts
Numbers begin 020 7921 (unless stated otherwise) Editor-in-chief Giles Barrie 8561 Executive editor James Whitmore 8565 Executive editor (online) Iain ONeil 8563 Assistant editors Hardeep Sandher (features) 020 7955 3925 Mike Phillips (news and nance) 8583 Richard Heap (professional) 8310 Residential editor Doug Morrison 020 8378 1147 Deputy web editor David Doyle 8564 Deputy news editor Kat Baker 8749 Deputy features editor David Hatcher 8574 Occupiers correspondent Christine Eade 8572 Senior reporters Nick Johnstone 8748 Patrick Gower 8597

Digital content producer Justin Broomes 020 7560 4085 Group production director Samantha Warrington 8576 Deputy chief sub-editor Felicity Haythorn 8587 Assistant chief sub-editor Andy Plowman 8533 Sub-editor Jonny Garrett 8580 Group art director Richard Krzyzak 8581 Art editor Tina Smith 8671 Client Solutions designer Rob Howells 8571 Editorial enquiries Charlotte Corcoran 8561 Editorial advisory board Paul Brundage; Jeremy Collins; Richard Dakin; Olivier de Poulpiquet; Jonathan Goldstein; Neville Khan; Bryan Laxton; John McCready; Robert Noel; David Sleath; Van Stults; Chris Taylor Group events director Sam Jennings 020 7560 4200 Commercial director Mike Hartley 8345 Awards and conferences manager Grant Elrick 8379 Public Property Summit James Lee 8224

RESI James McGough 8469 Southern regional managers Caroline Londono 8217 Jenni Saunders 8492 Matt Kingham 8431 Northern regional managers Elizabeth Durrant, Graham Lumley 0161 877 1106 Classied and recruitment manager Helen Simms 8474 Deals sales executive Nick Ross 8291 Corporate accounts manager (subscriptions) Abi Benedict 8486 Client solutions 020 7560 4291 Virtual solutions 020 7560 4229 Group marketing manager Ferial Chtini 4091 Divisional production manager Julian Creber 8043 Production controller Graham Winter 4130 Managing director Chris Kilbee 8350

Property Week, UBM Built Environment, Ludgate House, 245 Blackfriars Road, London SE1 9UY Editorial fax 8394 Advertising enquiries 8558 Recruitment advertising 8474 Email rstname.surname@ubm.com (except: Douglas.Morrison@ntlworld.com) Property Week is published by UBM Built Environment Annual subscriptions: 175 (UK), 215 (rest of Europe) and 329 (rest of the world) Subscriptions enquiries 01858 438892 Email: propertyweek@subscription.co.uk Volume 77 No 14 ISSN 1354-1471 Registered as a newspaper at the Post Oce Typeset by Clerkenwell Graphics Ltd Printed by St Ives plc United Business Media 2011

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Appointments
Chief Executve
The Crown Estate is a unique business that manages a vast and varied property portolio, comprising commercial property, agricultural and marine interests throughout Britain. The Chief Executve is responsible to the Chairman and Board for providing leadership and directon to the business with the primary objectve of maintaining and enhancing its capital value and the return obtained from it, with due regard to the requirements of good management. The vacancy has arisen following the decision by Roger Bright CB to retre as Chief Executve at the end of 2011. To meet this demanding role you must be a proven business leader of unqualied integrity. You will be able to form policies and energise your team to implement them condently. You must have the vision to shape and manage The Crown Estate through the next phase of its development while holding fast to its core values. Above all you must be able to marry the entrepreneurial spirit of a modern business with its historic legacy and high reputaton. The Crown Estate is a public body, operatng to high standards of probity alongside expectatons of excellent performance. Applicants will be required to identfy any areas where a conict of interest might arise if they are selected as a candidate for the long-list. If you consider that you possess the special qualites and experience to undertake this unique role and would like further informaton and details of the applicaton process please visit www.odgers.com/35260 or contact Odgers Berndtson on 0845 130 9005 quotng the reference 35260. Closing date for responses to the advertsement is 27 April 2011. Preliminary interviews are scheduled from 10 May 2011. Final interviews will be held in London on 6 July 2011. The Crown Estate is commited to diversity and welcomes applicatons from all sectons of the community.
COMMERCIALISM INTEGRITY STEWARDSHIP

If youve got the vacancies, weve got the audience.

SENIOR VALUATION SURVEYOR/ASSOCIATE

to work in Central London
You will have Residential and Commercial valuation experience with a minimum of 5 years post qualification & lead generating experience and a full UK driving licence Please email CVs to Frederika.casapieri@chestertonhumberts.com or call 020 7298 5935 for an informal chat

Chesterton Humberts are looking for a

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APPOINTMENTS

Property Surveyor
COMPETITIVE PACKAGE + CAR ALLOWANCE
Shepherd Group Properties Ltd is part of one of the leading family-owned private businesses in the UK. The Groups operations, in national and international markets include substantial companies in Construction and Engineering, Manufacturing and Property Development. A vacancy has arisen for a Property Surveyor. Reporting directly to the Director, this is a key role within the Company with responsibility for managing an extensive portfolio of properties on behalf of the Shepherd Group. The position involves the identification, negotiation and acquisition of freehold and leasehold property, the disposal of Group properties and the ongoing management of the Company portfolio. Ideally working towards MRICS qualification or MRICS qualified, the successful candidate will be able to demonstrate strong project management, negotiation and decision making skills. Working independently but also to a wide range of stakeholders, you will have excellent Microsoft Office skills, interpersonal and communication skills, have worked on rent reviews and lease renewals, have a working knowledge of contracts, property acquisition and disposal together with a flexible attitude to work and travel within the UK and Northern Europe as required. To apply send your CV with current salary package to Judith French, HR Dept., Shepherd Building Group Ltd, Huntington House, Jockey Lane, Huntington, York YO32 9XW or email: careers@shepherd-group.com Strictly No Agencies please Closing date: 15 April 2011

Based York

www.shepherd-group.com

FOR FURTHER COMPANY INFORMATION VISIT

Chartered Building Surveyors

Would you like to work for one of the fastest growing and dynamic building consultancies in the UK? We have offices in London, Bristol, Manchester, Liverpool, Edinburgh and Glasgow. We are looking for two enthusiastic and motivated senior building surveyors to join our team in London. For more information, or an informal chat, contact Trevor Dowd on: 020 7280 8153 Alternatively email your CV and covering letter to: trevor.dowd@tridentbc.com Or post it to: Trident Building Consultancy, 10 King William Street, London, EC4N 7TW

COMMERCIAL AGENCY SURVEYOR

Hindwoods are leading Chartered Surveyors Established in south London since 1886. An experienced, ambitious and commercially aware Surveyor is required to join our successful commercial Team based in Greenwich town centre. You will need to be a hard working fee earner who is committed to providing the highest possible level of service and advice to our clients which include pension funds, local and national government, PLC companies, charities and a wide range of private companies. This important role in our expanding company offers excellent opportunities for career progression and a highly competitive remuneration package is available. To discuss this opportunity contact Kevin Bright on 07720 407088. Alternatively email your CV to k.bright@hindwoods.co.uk hindwoods.co.uk

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APPOINTMENTS

HEAD OF COMMERCIAL PROPERTY INVESTMENT

GOSFORTH PARK WAY, NEWCASTLE (Ref: 10/792) Circa 60,000 per annum + car allowance
Home Group is a major property business, with over 50,000 homes and nearly 100 commercial premises. With a turnover over 300m and a balance sheet in excess of 1bn, we have an ambitious expansion programme, and are looking to recruit an experienced commercial property surveyor with proven senior management capability. The role requires strong leadership skills to head up a new commercial property team to support a customer focused delivery team responsible for of residential and commercial property valuation, acquisition and disposal, a broad portfolio of commercial property management as well as contributing to commercial property investment strategy. The ideal candidate will be educated to degree level and will also possess a RICS Professional qualification with proven work related ability to deliver the role. Closing date: Sunday 17th April 2011 To apply please complete our online application form at www.homegroup.org.uk. We only accept electronically submitted forms, however, if you are unable to access due to a disability please contact us on 08451550397 or recruitment@homegroup.org.uk
We are an independent Chartered Building Surveying Practice who specialises in Party Wall and Neighbourly matters and Rights of Light, Daylight and Sunlight matters

Our business is continually growing and as a result we have positions available for experienced

and

Rights of Light Party Wall Surveyors

This is an exciting opportunity within a niche practice for Associate level surveyors who will be instrumental in the companys growth. Location: ST ALBANS Salary: Excellent salary with guaranteed bonus scheme Closing date: 29 April 2011 Applications to be sent to:

Home Group Limited (Charitable I & P Society No. 22981R)

louise@behanllp.co.uk
Keenan & Co is an established, vibrant, boutique retail property consultancy based in the heart of Mayfair with an excellent and growing Blue Chip client base of retail property owners and occupiers.

Watts is a leading consultant to the property and construction industry. With more than 40 years' experience across all building types and market sectors, the Group delivers independent, expert advice through a network of offices across the UK, Ireland and Northern Europe. We are actively recruiting for a number of positions at various levels, and across a number of our UK offices. In particular we are recruiting for Directors in Birmingham and London, and Chartered Building Surveyors/Project Managers in Glasgow, London and Manchester. To apply, or for further details on all of our vacancies please visit www.watts-int.com. We are always looking for talented professionals so if that's you, and you're interested in a career with Watts and have something to offer us, why not get in touch at human.resources@watts-int.com.
Watts Group PLC is an Equal Opportunities Employer committed to promoting equality in the work place.

We are now looking to increase our team and are seeking to recruit an exceptional Graduate Trainee and ambitious Junior Retail Surveyor.

For this post you will have graduated/be due to graduate in 2011 with an RICS Exempting Honours Degree (2:1 or first) ideally with some relevant holiday work experience. In addition to your academic performance, you will need to demonstrate excellent interpersonal and communication skills (written and oral), the ability to deliver and achieve results, and the ability to learn quickly and be a true team player. Most importantly, we want an individual with outstanding potential, drive and commitment. In return we will provide excellent training to RICS qualification and a dynamic, fun work environment.

Graduate Trainee

For this post you will need to have qualified (or be about to qualify) with a minimum 18 months experience dealing with retail property. In additional to your professional qualifications and experience, you will need to have a proven track record of success, an excellent eye for detail, proven interpersonal and communications skills (written and oral) and evidence of good commercial judgement/ skills. You will need to be a true team player that thrives under pressure and has the drive and ambition to rapidly progress through the organisation. We would expect the successful candidate to be on a fast track to Associate Directorship and will offer a range of other benefits designed to incentivise and reward high performance.
Applications by Thursday 21st April 2011 in the form of a CV plus covering letter which will be treated in strictest confidence to be sent to:- Paula Floyd, Keenan & Co, 31 St George Street, London W1S 2FJ. Tel: 020 7297 4818. Email: paula@keenanandco.com

Junior Surveyor

International property and construction consultants

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APPOINTMENTS

Bring your Career to Fruition

Fruition Properties is a highly regarded and innovative property developer that specialises in planning enhancement and development within the London area and prides itself on its creative thinking, the quality of its product and its professionalism. We are recruiting an experienced LAND MANAGER to join our small and successful team and to actively seek out new projects.You will be responsible for the acquisition of land and will work with the team to deliver it though the planning process. The successful applicant must have: Relevant skills in all aspects of land acquisition including identification of opportunities, planning, production of financial and viability appraisals Experience along with knowledge and contacts in North,West and Central London, with a demonstrable record of securing new development schemes Exceptional levels of professionalism, communication and presentation skills, as well as energy and ambition Self-motivation and confidence with a strong work ethic Strong commercial acumen RICS qualification

THE POSITION WILL OFFER A COMPETITIVE SALARY WITH BENEFITS.

Be part of a small and friendly team where you can make a significant contribution to the future expansion of this successful and ambitious company. Please email your CV to monica@fruitionproperties.co.uk by the 20th April 2011.

Its time you came knocking

Now is a very exciting time to be joining Premier Inn. Were expanding signicantly with an award-winning budget hotels offer that consistently outperforms the competition. One of Whitbreads most successful brands, we enjoy substantial FTSE-100 backing as we work to add 15,000 more rooms to our domestic portfolio across 300 prime UK locations. This is our time. If youre at the top of your game, it could be yours too.

Head of Property
Based Glasgow or Hammersmith, London travel will be required from either location
Maggies is a young, dynamic charity providing information and psychological support to anyone affected by cancer. We are looking for a highly motivated and experienced person to be responsible for a wide range of property matters including managing the construction programme of a number of new centres. In addition, the Head of Property will take responsibility for the estate management of a number of Maggies existing centres as agreed with the Property Director and will assist in advising Maggies Executive on other property matters. The Head of Property will assist the Property Director in establishing systems and processes to ensure that all elements of Maggies existing and future property portfolio are managed effectively including acquisitions, disposals and other title matters, compliance, insurance, health & safety, planned maintenance, budgeting, statutory consents and approvals, development management, construction contracts, professional appointments, and delivery commissioning and hand over arrangements. Maggies Head of Property will be an experienced property or construction professional with a well-rounded technical background. The post holder will have an afnity and enthusiasm for exceptional architectural design and the importance it plays within the organisation. With at least 5 years relevant post qualication experience in the property or construction industry, the post holder will have excellent planning and organisational skills, nancial management skills, the ability to communicate with a wide variety of audiences.
A full job description and person specication can be downloaded at www.maggiescentres.org/recruitment Applications should be by email only in the format of CV with covering letter to: Carys Winship, Staff & Resources Manager, Maggies carys.winship@maggiescentres.org Closing Date for applications is 5pm, 11th April 2011.

Acquisitions Managers - London & East Mids/Anglia to 55k

Acquire sites and secure planning permission for a market leader with exceptional growth plans.You need a strong results-driven track record that shows sound commercial judgement in the sector.

Property Procurement Manager to 45k

Do the best commercial deals by driving construction costs and time down in a 70m spend across an extensive supplier base.Your impressive retail/leisure experience reveals a relentless pursuit of results.

Maintenance Manager to 45k

Keep our properties up to standard by managing our preventative and reactive maintenance supply chains with no overspends.Your substantial multi-site corporate experience demonstrates serious commercial acumen.

Project & Programme Manager to 45k

Drive our new build extensions and bolt-ons cost-effectively. To do this you must be an experienced construction project manager who gets things done through robust end-to-end process management. Dont miss this chance to do what you do best - with the best in the business. Find out more and apply today at www.whitbreadcareers.co.uk

www.maggiescentres.org

Maggies is a registered charity number SC024414

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