Land Securities and British Land have both reported stonking results for the year to March. No surprise. But what of this year, next year and the year after?
Examine the utterances of both chief executives. A divergence emerges. Rob Noel of LandSec points out that his gearing is “down to 28.5%” and adds: “In London, we reached the peak of construction activity.” Note the word “peak”. The word “future” appears once in his press release.
Chris Grigg of British Land is more buoyant. The word “future” appears nine times in the BL release. “Our results give us confidence we are well positioned for changing trends in real estate: we have a modern portfolio focused on the right locations… and an exciting development programme.” Too exciting for LandSec’s taste.
Whitehall cuts: it’s serious
New government business is proceeding as it should. Savage cuts to the number of civil servants operating in Whitehall have been announced, a tradition harking back to time immemorial.
It will be interesting to see if the mandarins can again resist dispersal successfully, as this time around things might be a bit different. The mood of the Cabinet Office is summed up by this remark from an insider: “If every department reduced its Whitehall staff levels to 1,000, we’d have 19,000 working in Whitehall instead of 53,000.”
Wishful thinking? Yes. But thinking helped along by a plan to charge against the budget of each department the local market rate for office space, not what they are paying.
A wind of change, driven by technology, is also at work. “We set up all this expensive teleconferencing, but nobody much used it. Now we all use Google Hangout. You can work from anywhere,” said the insider. Cool, yeah? What on earth is Google Hangout?
McAlpine takes it on the chin
McAlpine’s £90m loss will be Iceland’s gain, it seems. No, not the frozen food outlet, the Icelandic government. The half-frozen state retains a stake in Fitzroy Place, W1, taken when Icelandic bank Kaupthing went bust in 2008.
The family-owned builder has admitted its losses “to a great extent, are due to one difficult project”. This is the fixed-price contract signed in 2011 for £160m to build 1m sq ft of residential and office space for Exemplar and Aviva north of Oxford Street. McAlpine is taking on the chin losses racked up by spiralling costs.
How are Dan van Gelder and Clive Bush of Exemplar feeling about providing some recompense for the pain? Perhaps an offer to the McAlpine family of a free facial at Estée Lauder, which is moving its HQ to Fitzroy Place, to help restore face?
Thank heaven for s106
The Haringey Gospel Hall Trust will be thanking providence for the £27m received from Barratt, which plans to build 70 homes on the six-acre site of a redundant gospel hall in North London. Barratt will not be praising Barnet council, which managed to extract section 106 payments of £1.7m plus a community hall worth £776,000 – about £32,000 per unit in total.
Councils were instructed to switch from section 106 payments to the community infrastructure levy in April. CIL restricts off-site payments. Barnet has set its CIL rate at £135 per sq m for residential. Barratt’s cash payment would have been less than £1m under the new regime, at a rough guess. Is it any wonder other councils are dragging their heels fixing CIL rates?
Logo makeover for C&W?
It will be interesting to see if Cushman & Wakefield takes the opportunity to refresh its brand after the DTZ takeover and the coming abandonment of the latter’s crisp logo.
In late 2012 I had breakfast with Carlo di Sant’Albano, then working for the Agnelli family, who now, as European boss of C&W, is close to the top of the rigging of the soon-to-be-combined businesses. We met at an elegant Mayfair club, where I suggested the C&W logo, with its heavy typeface topped with a crowned glove, could do with a makeover. He smiled and said: “It’s the Americans. They love it.”
Not for much longer, you get the feeling.
