MORNING NEWS: All you need to know for property from the Budget

Good morning. Here’s your daily round-up of the latest news and views from EG and a collection of industry-relevant headlines from the nationals. It’s all about yesterday’s Budget this morning, which was labelled an “utter disappointment”, a “kick in the teeth” and “little to cheer about” from leaders across real estate. Jeremy Hunt’s hour-plus-long speech failed to give any sort of meaningful boost for the property sector. There was news on more levelling up funding – including for Barking Riverside and Canary Wharf – more devolution, investment into life sciences as well as changes to capital gains tax and empty rates relief. But there was little in relation to significant business rates reform, planning or tax-free shopping for tourists, which were among the key issues that the industry had hoped would be addressed.    “The Spring Budget provided the government with a perfect opportunity to put housing front and centre, to invest in and simplify the planning system to deliver the new homes that the country is crying out for – but they did not take it,” said UKAA chief executive Brendan Geraghty. “The chancellor has squandered his last chance to keep his party’s manifesto promise to reduce business rates for retail,” said Vivienne King, chair of the Shopkeepers’ Campaign. “His decision to let the standard multiplier rise in line with September’s 6.7% CPI figure – when inflation today is at 4% and falling – will reduce investment by the 220,000 biggest occupiers of commercial space in the UK.” You get the gist. And you can read all the industry reaction here. EG also exclusively reveals this morning research from the smart people at AHMM, who have finally provided some numbers to prove property’s best-known secret: Cat A fit-outs are a waste of time and effort, a waste of money and, most importantly, a huge carbon cost to the planet. The research shows the true whole-life carbon cost of the Cat A fit-out/rip out cycle that is well rehearsed in real estate. A landlord fits out a building to Cat A to lure in a tenant; the tenant is lured; they strip out the fit-out and do something more to their taste. Over the lifetime of a building, that can cost some 470 tonnes of carbon per sq m. It’s a must-read report that proposes “radical change” in the speculative office market. “A lack of data has resulted in a lack of clarity about the scale of the Cat A problem,” says AHMM building performance analyst Ella Smith. “As a result, it has been difficult to find viable solutions to solve the issue. However, this report has quantified the potential carbon impact of Cat A and shone a light on the driving forces keeping the practice in place. “There needs to be industry-wide mindset change to reform the complex paradigm that is Cat A fit-out. Critically, value must be found within the new ways of working for stakeholders in the industry, as well as the planet.” But if you need some reasons to be cheerful, BNP PRE is predicting that annual returns for prime UK real estate could reach 11% by 2028, with the regions performing most strongly and offices outperforming prime industrial and prime retail.  “With inflation falling and base rate cuts within sight, there are signals that we are at the beginning of the next real estate cycle,” said Charlie Tattersall, associate director of capital markets research at BNP PRE. All of the news from EG, plus a selection of headlines from the nationals: £1bn plans for Bermondsey Biscuit Factory approvedCounting the carbon cost of Cat A fit-outsReturns for prime UK CRE to reach 11% by 2028Fun and games: Landsec to lift leisure at Square Mile shopping centreRegional developer looks to shake-up co-living marketEDITOR’S COMMENT: A Budget for business? Oh no it isn’tVOA launches surveyor returnship programmeEnd in sight for Irish bad bankClean energy firm signs deal for BL’s Paper YardThe Lehman liquidators taking on China’s Evergrande (£)Canary Wharf gains £118m loan in Budget (£)Oxford planners drop ‘toxic’ 15-minute city phrase (£)Battle of Southend airport ends as owner gives in to Carlyle (£)Boots orders staff back to the office five days a week (£)Astrazeneca to build £450m vaccine hub in Liverpool (£)