Jonathan De Mello

The #retail #investment market is heating up nicely. Volumes were undeniably disappointing in H1 2024 (£2.23bn vs £2.89bn last time), but the tide is turning. #Investor demand is strongest for #retailwarehousing and #yields are starting to harden accordingly, although a lack of stock is holding back volumes. The pool of buyers for #shoppingcentres is the deepest it has been for 5 years. Anticipated #interestrate cuts from Sep should also see the market in better stead. #kfretail #highstreet #retailproperty #retailrealestate Charlie Barke Will Lund Dominic Walton Alastair Bird Freddie MacColl Daniel Serfontein MRICS Volkan Denli MRICS Agatha Eyston https://lnkd.in/eg64nZfx

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Sky News reports that major UK retailers like Tesco, Kingfisher plc and Asda are warning that the Labour government’s new tax bills and changes to the retail benefit threshold down to £5,000 earned will add £2.5B to the UK retail industry’s annual tax bill to Westminster. This they say will lead to layoffs, more automation and store costs resulting in closings. #ukretail #taxes #staffing #governmentpolicy #nhs #benefits #retailoperations

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Today’s inflation figures for July in both UK and US came in below exceptations increasing likelihood of further interest rate cuts on both sides of the Atlantic.

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Despite a decline in sales performance, vacancy rates continued to decrease in the first quarter of 2024, particularly in the prime West End where rental growth reached 11.7% year-on-year. While foot traffic in the West End saw an increase compared to 2023, sales still fell short of last year's levels. International sales had a strong start in 2024 due to extended holidays, with the first week of January accounting for a significant portion of total international spend for the month. However, sales for the rest of the Quarter were lower compared to 2023, especially from Gulf countries. The decrease in sales could be attributed to Ramadan, as there was a noticeable 17% drop in sales starting from 10 March compared to the previous year. The Easter weekend also had an impact on foot traffic and spending, with Good Friday seeing the highest footfall and Saturday the lowest. It is likely that many people chose to leave the Capital for the Easter weekend. See more:

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🇬🇧 Some not so big surprises, have gone bust in retail - “Intu Properties, the major property company that owns and manages some of the largest and best UK retail malls, went into administration on 26 June 2020. Many of its retail clients are not paying their rents and INTU's creditors are not as forebearing. It has total debts of £4.5bn, a merger with a European property company came to nothing and it has failed to raise more capital. Its recent negotations with other parties, where it hoped to arrange a 'standstill agreement' with its lenders, led to no useful outcome, so it went into administration. Major sites include #Lakeside, Glasgow's #Braehead, Manchester's #TraffordCentre, Nottingham's #VictoriaCentre & Norwich's #Chapelfield. This administration will be a major blow to the UK retail sector, although, coming after many other impossible-to-believe 'major blows', its significance may be less apparent. It may not be possible for the Administrators to run all the shopping centres without outside funding, although so far all sites have been kept open. It is still possible that many of their shopping centres will close unless a new potential buyer acquires some or all of them. Some observers who have used the lockdown to re-think their personal philosophy may rejoice at the decline of this bastion of consumerism. But the destruction of asset wealth in terms of commercial property, will adversely affect property prices, the stability of most retailers, pension funds, shares, unit trusts, tax revenue, job opportunities etc etc and bring home to the public the enormity of the slump we have managed to stumble into.” - “Norwich's Castle Quarter hits the market for £23.55m. Savills has been appointed by receivers to market former #Intu shopping centre #TheCastleQuarter in Norwich for offers in excess of £23.55m. Castle Quarter aerial. A sale at the asking price would reflect a net initial yield of 10% and a capital value of £61/sq ft” Also, “#EastKilbride Shopping Centre, Scotland's largest undercover shopping centre, is being offered for sale by its administrators. There are 150 shops covering a total of more than 1 million square feet of space. There are plans to reorganise the town centre involving the demolition of the nearby Centre West Shopping Centre as well as building 400 homes.” #commercial #Intuproperties #shoppingcentres #retail #malls #dominoeffect #towncentres #retailers #company #administrations #valuedestroyers #assetwealthdestruction

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The UK retail warehouse investment market experienced a slow first quarter due to limited stock availability. Despite this, pricing remained strong, indicating a positive shift in investor sentiment and confidence in returns, particularly in the South East and beyond. It is evident that transaction volumes in Q1 2024 were lower compared to previous years, with £451m transacted. This represents a 16% decrease from the same period last year and a 33% drop from the long-term average. However, the increase in pricing suggests a more optimistic outlook among investors, although some caution remains regarding lot size and location. Learn more:

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🏬 UK Retail Property: A Market Ready for Revival After a challenging decade, the UK retail property market is showing signs of recovery. Recent high-profile deals, such as British Land’s sale of a stake in Meadowhall shopping centre for £360 million and Land Securities’ increased stake in the Bluewater centre, highlight a renewed interest in physical retail spaces. This shift is driven by a combination of attractive valuations and a resurgence in consumer interest in brick-and-mortar stores. 🚀 Tasklane: Empowering Property Managers in a Revitalized Market As the retail property sector bounces back, Tasklane provides the tools needed to capitalize on these opportunities: - 📊 Market Analytics: Stay ahead with real-time data and insights to make informed investment decisions. - 🛠 Efficient Maintenance: Ensure your properties are in top condition to attract and retain tenants. - 🔍 Occupancy Optimization: Use Tasklane’s tools to maintain high occupancy rates and maximize rental income. Transform Your Property Management with Tasklane!! Discover how Tasklane can help you navigate the recovering retail property market. Visit www.tasklane.app for more information. 🔗 Learn More About the News Article: https://lnkd.in/eetryGCS #Tasklane #PropertyManagement #RealEstate #UKRetail #MarketRecovery #realestatemanagement #propertymanagement #CRE #Resi

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This week has seen the release of various studies into the health of UK Town Centres. Interesting reading - especially in the context of wider more difficult macro economic difficulties. At the launch of the latest Revo - Retail. Property. Community. and Lambert Smith Hampton yesterday morning the results of its industry survey revealed that those respondants felt that in most town centres there remains 20-40% too much retail space. Tellingly of all the 'solutions' envisaged as vital to a town centre - retail ranked low. This issue is particulalry acute in the north where viability for repurposing is extremely challenging, in many (most?) instances development only able to proceed with public sector funding support. This picture is corroborated in the Local Data Company retail vacancy monitor which is profiled in the React News article linked below. With a few exceptions northern towns and shopping centres faring worst for vacancy levels. The vacancy picture may be better the further South - but these challenges in bringing forward development are becoming increasingly universal. The problems have been recognised and some effort has gone into starting to resolve the issues - with Levelling Up and Future High Streets funding having been made available to support many locations. Our experience is that the implentation of many of the projects identified under these schemes has been hampered by poor execution, rising costs and other challenges, and if we were to look at this survey in three years time - the benefits of these initiatives may not be realised in a tangible improvement in the metrics. The Director of Regeneration at Wolverhampton Richard Lawrence was a speaker at the Revo event and highlighted the success that the city had had in bringing forward development - generally in partnership arrangements between public and private sector - but this after many years of focussed effort. Meaningful change in any location will need a strong leadership and range of tools to enable. In a time of challenged local authority finances we need to hope that the issues remain high on the national political agenda around this election period and beyond.

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We wrote "The Retail Equation" in 2017 with a bit of science and a load of guesswork, but it turns out that we were right ✅. In 2024, we now know that online is here to stay, but sales have plateaued (as predicted) and shops and stores form the majority channel for consumers and the most profitable place for brands. If you're in it, you are probably winning. Well done! #shops #stores #bricks #retaillogistics #retailequation #retail #jll #ynwa

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In the dynamic world of Soho retail, change is the only constant. Despite strong demand, we've seen a 0.7% increase in availability, reflecting a nuanced shift in the market. Interestingly, most of the newly available storefronts are smaller spaces situated outside of the main Broadway corridor. This trend underscores the evolving nature of Soho's retail scene, where businesses are exploring alternative locations beyond the traditional hotspots. As a result, there's a diverse range of opportunities emerging for retailers looking to establish their presence in this iconic neighborhood. #SohoRetail #RetailTrends #CommercialRealEstate #NYCShopping

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The UK retail warehouse investment market experienced a lack of stock in the first quarter, leading to lower transaction volumes. Despite this, pricing has increased, indicating a positive shift in investor sentiment and confidence in returns for schemes, particularly in the South East and beyond. It is clear that the first quarter of 2024 has been challenging for the UK retail warehouse investment market in terms of transaction volumes. With only £451m transacted, this represents a 16% decrease compared to the same period last year and a 33% reduction from the long-term quarter average. However, the rise in pricing this year suggests that investors are feeling more optimistic, although some caution remains regarding lot size and location. It seems that the negativity seen in transaction volumes since the second half of 2023 is slowly dissipating. Read more:

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The UK retail warehouse investment market experienced a slow first quarter due to limited stock availability. Despite this, pricing remained strong, indicating a positive shift in investor sentiment and confidence in returns, particularly in the South East and beyond. It is evident that transaction volumes in Q1 2024 were lower compared to previous years, with £451m transacted. This represents a 16% decrease from the same period last year and a 33% drop from the long-term average. However, the increase in pricing suggests a more optimistic outlook among investors, although some caution remains regarding lot size and location. Learn more:

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Insolvency Practioners like Deloitte and Teneo, have routinely been charging excessive fees, particularly since the demise of Woolworths, in return for ‘engineering’, CVA’s, ‘Pre Packs’ and Insolvency Plans, with little or no external oversight Group Company owners, have been enabled to pose as ‘secured lenders’, to acquire retail assets, at ‘pennies in the pound’ whilst avoiding liabilities, including paying suppliers, pensions and redundancy payments Insolvency laws need to be reformed, to ensure Practitioners are not working ‘hand in glove’ with Company Owners, but are focused on achieving the best outcomes for Creditors https://lnkd.in/eHHmdVHU https://lnkd.in/e6MuPKFC

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On GCW's website, under Opinions, Michael Hardy's Opinion. "From Retailer to Landlord" is, with respect, nothing new. Ok, it's relatively new for entire shopping centres but not for freeholds otherwise. Long ago, British Shoe Corporation bought the freehold, as did C&A, Boots, F Hinds, John Lewis, most independent department stores, and several other multiple retailers. I used to act for Waide Pollard & Sons Ltd - until they went broke after more than 100 years - amongst their 76 branches were a few parades of shops where they occupied one or two units; the other shops let. One of my regular clients used to have some 45 branches, which, when it sold the business, kept the freeholds, a few of which it still owns. As for one-off landlords, many were owner-occupiers before selling the business on a new lease and keeping the freehold as investments. Speaking of which, where a landlord, having been the owner-occupier, grants a new lease in conjunction with the sale of the business; generally, the initial rent is based on the profitability of the business. At the first rent review, chances are that it'll be a nil increase because the initial rent was over-rented compared to the open market rent (as defined by the lease). The test of whether an initial rent is the same as the open market rent (as defined by the lease) is that if there were a rent review on the same day as the term commencement date, it would be the same rent. I've lost count of the number of ex-owner-occupiers now landlords, for whom I've acted, who've been disappointed at the outcome of the first rent review. If only, as I tell them, they'd consulted an experienced surveyor, not necessarily me, they would've been advised how to avoid nil increase. Interestingly, considering how much of a favour such tenants think they're doing, landlords whose rents are index-linked to cap and collar are likely to get at least the minimum increase. I have landlord clients - I am sure other surveyors and other professional advisers, for example, lawyers and accountants, do too - who wouldn't let their shops go to betting offices or amusement centres, or such like, because they don't approve of gambling. Fair enough, but ironic. Usually, their commercial property investment rent reviews are to open market rent. An open market rent is a gamble - a high risk - because the valuation methodology is invariably comparable evidence, which means relying on what other landlords and tenants have agreed. Where evidence is scarce or non-existent, opinion evidence is also risky because a third party whose opinion is binding under the lease might not agree.

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Spotting trends - Are we seeing a shift in balance between online and physical shopping? Great research piece. % of online sales levelling off and expected to see first reversal from 23% to 22% of total sales for 2024. Whilst physical footfall is below pre-Covid, spend is up in prime locations. Over 200 new stores planned this year and more pure online brands opening stores. Store costs have rebalanced to a new world with rent and business rate reductions whilst the online world tackles higher transport costs and the ever present returns cost. It feels like this is a necessary dip as the value of physical stores has rebalanced and the market becomes more hybrid. The longer term journey remains online sales rising to 30% of total sales by 2030, but this reinforces the importance of having the right physical stores and their role as being a strong part of any regeneration mix for our cities. https://lnkd.in/eej-cbq6

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