National Australia Bank is to abandon commercial property lending in the UK and cut 1,400 jobs,
XYNO Properties is an international property investment company, investing into commercial real estate in Switzerland, The United Kingdom and the USA. Follow our blog for updates on the international property market, related financial news and updates on our products
Monday, 30 April 2012
Sunday, 29 April 2012
Friday, 27 April 2012
9.8% total return for Commercial Real Estate in 2011
Commercial Property has delivered a return of 9.8% globally in 2011, Please read article below for the full story...
Global commercial property delivered a 9.8% total return in 2011; Irish returns in Q1 2012 were at 0.6%
Global commercial property delivered a 9.8% total return in 2011; Irish returns in Q1 2012 were at 0.6%
Wednesday, 25 April 2012
Swiss property market maintains its winning streak
Please see the latest news on the Swiss Property market below..
Swiss property market maintains its winning streak
Swiss property market maintains its winning streak
Monday, 23 April 2012
UK Update
The total value of UK commercial property investment transactions
in Q1 2012 was £7.53 billion, down 27% on the same period for 2011. Central
London office investment broke £4 billion for the quarter – the highest
figure since the financial crisis. Overseas investors spent £3 billion
during the first quarter – representing 42% of all purchases. Retail
investment fell from £3.15 billion in Q1 2011 to £1.42 billion in the latest
quarter
- Hedge funds are increasingly looking outside the traditional
locations of Mayfair and St James’s for London offices, according to new
research by Jones Lang LaSalle, but the West End still remains their
preferred location. JLL research published this week, called “Hedging the
Risk”, said the location preferences of hedge funds had “expanded”, and that
they would look further afield to north of Oxford Street – pushing prime
rents in the area to record-breaking levels. The report said hedge funds,
which have traditionally been comfortable paying rents of £100/sq ft or more
because of their high margins and low staff numbers, were now also
considering prime buildings in Knightsbridge, as well central London “Trophy
Buildings” such as the Heron Tower and The Shard. Nonetheless, the report
confirmed that the West End was still the number one destination for hedge
funds in Europe, and said rents would increase in the area, primarily due to
the lack of space available. Andrew Barnes, director in Jones Lang LaSalle’s
West End agency team, said: “There has been a definite change in where hedge
fund managers will consider looking, with some now prepared to consider
alternative locations to keep occupational costs in check, particularly if
the building has a high profile. However, for some, Mayfair will always
remain the premier choice despite costs.”
- Barratt Homes, Taylor Wimpey and the London Development Agency
have been given the green light for the final phase of their 780-apartment
scheme next to London’s Thames Barrier. At a Newham Council meeting on
Tuesday night the developers were given planning consent for the fifth phase
of the Barrier Park East development, also known as Waterside Park. The
fifth phase comprises 192,000 sq ft of residential space across 193 flats as
well as 4,250 sq ft of commercial space and a 1,550 sq ft crèche. Consent
was granted following issues previously raised by the Newham council over
layout, appearance, scale access and landscaping. A report before the
council on Tuesday said the council’s concerns had been alleviated. Barrier
Park East, located in Newham’s Royal Docks, was first given outline planning
approval in December 2009. It comprises 780 homes as well as retail, leisure
and community uses. Occupation of homes in the first phase began in December
last year and the second phase, Connaught House, is complete and occupied.
The third phase, Meadow View, will be available for occupation at the end of
this year and fully complete in February 2013. The whole scheme is due to be
completed by March 2016.
- William Hill confident as profit rises 19%: (WILLIAM HILL IS A
TENNANT IN OUR ALDERSGATE PROPERTY INVESTMENT IN LONDON - NICO) William Hill
said that it was “confident” of its prospects for the year ahead, as it
announced that operating profits rose 19 per cent in the first quarter,
fuelled by high margins in its retail business and the growing popularity of
online betting. With smartphone use on the rise, the company’s Sportsbook
mobile app was downloaded 190,000 times from the Apple App Store during the
quarter, bringing William Hill around 57,000 new customers, and helping its
online division to post £38.3m in operating profits, up 29 per cent on the
year before. Ralph Topping, chief executive, said that he was “pleased” with
the results. “Our investments in marketing and innovations continue to
deliver benefits, with our Sportsbook exceeding £50m in turnover in a single
week for the first time during the quarter and mobile turnover reaching
almost £11m in a single week,” he said, adding that the success of the
company’s online operations highlighted the importance of its multi-channel
offering. Operating profits from the group’s retail operations were up 8 per
cent, as gross win margins rose from 18.1 to 19.4 per cent, thanks in part
to a string of bookmaker-friendly football results. Analysts at Investec
said they were upgrading their earnings forecasts for William Hill following
the announcement, and described its margin performance as “exceptional”.
“The 220 bps margin outperformance versus Ladbrokes is eye-catching (19.4%
vs 17.2%) and, we think, reflects a higher proportion of football wagering
at William Hill (higher underlying and first quarter seasonal margin than
horseracing) and a superior trading operation,” they wrote. Ladbrokes, a
rival UK-based bookmaker, said on Thursday that its operating profits rose
by 3.9 per cent in the first quarter. Shares in the company, which have
risen 35 per cent this year, were up 3.19 per cent at 275.3p in early
morning trading in London, a level not seen since 2008.
- IMF sees banks deleveraging by $2.6tn: A drastic contraction of
European bank balance sheets during the next 18 months could jeopardise
financial stability and economic growth in Europe and beyond, according to
forecasts from the International Monetary Fund. In its Global Financial
Stability Report, published on Wednesday, the fund warned that European
banks looked set to shrink their balance sheets by $2.6tn (€2tn) over that
period. Unless officials improved their policy response, the IMF said,
European banks would dump almost 7 per cent of their assets by the end of
next year. The IMF expects most of the deleveraging to come from sales of
securities and non-core assets. However, it also sees credit supply
shrinking by 1.7 per cent as banks rein in lending to businesses and
households hitting the broader economy. After examining the efforts of the
continent’s 58 largest banks to boost their capital ratios, shed
unprofitable businesses and cut their reliance on wholesale funding, the
fund’s analysts predicted the deleveraging process would be more severe than
previously anticipated. While acknowledging that balance sheets needed to
shrink after the financial excess seen in the run-up to the crisis, the IMF
warned that the risk of a “synchronised and large-scale deleveraging” could
spark financial instability and hit economic growth. “The highly uncertain
European policy backdrop is driving banks to keep shrinking, even if we
avoided a disorderly and abrupt crunch,” warns Huw van Steenis, banking
analyst at Morgan Stanley. The fund said better policies – such as a
consideration of more easing by the European Central Bank and further
structural reforms, as well as progress on bank restructuring and resolution
– would prompt a smaller, 6 per cent contraction in banks’ balance sheets,
which would boost euro-area growth by 0.6 per cent. IMF assessments assume
the bulk of deleveraging will occur through the form of asset sales, rather
than a drop-off in lending. Andrea Enria, chair of the European Banking
Authority, said earlier this month less than 1 per cent of the deleveraging
represented true cuts to lending. The IMF also vindicates the EBA’s
controversial call for banks to hold at least 9 per cent capital by finding
evidence that higher equity buffers and capital ratios boosted banks’ share
prices. “Banks with higher tier one capital outperformed other sample banks
during the European sovereign debt crisis,” it said, adding that a 1
percentage point increase in a bank’s capital ratio during the past two
years added 0.5 per cent to monthly stock returns. Elsewhere in the report,
the fund warned of the risks presented by an ever-decreasing stock of “safe”
assets. “The number of sovereigns whose debt is considered safe is declining
– taking potentially $9tn in safe assets out of the market by 2016, which is
roughly 16 per cent of the projected total.” It expects this trend to
inflate prices for the few remaining assets deemed to be safe.
- Tesco announced it will reduce new net space growth by 38% and
spend £1bn revamping its existing estate in a preliminary results statement
released this morning. (TESCO IS ALSO A TENNANT IN OUR ALDERSGATE PROPERTY
INVESTMENT IN LONDON AND WAS ALSO IN OUR SHEFFIELD RETAIL ACQUISITION WHICH
NETTED INVESTORS AN IRR OF 101% - NICO) The supermarket giant reported a
1.6% rise in underlying pre-tax profits to £3.9bn for the year to February
25, 2012. Group sales went up 7.4% to £72bn. A store refurbishment programme
will start this year as part of a £1bn commitment to improve the Tesco
shopping experience for customers. The programme will start with 430 stores,
which will see warmer colours, better lighting and a stronger emphasis on
fresh food. This includes around £400m of capital investment and will focus
on service, store formats, pricing, range and rolling out click and collect.
However, the company said overall group capital expenditure would be lower
this financial year, down from £3.8bn in 2011/12 to £3.3bn in 2012/13,
mainly driven by the reduced new store opening programme in the UK. Profits
from the UK business were down 1% for the period to £2.5bn, as customers
continued to be squeezed by falling incomes and high petrol prices. Chief
executive Philip Clarke admitted that investing more into the UK store
estate would affect profits in the short term. “These are decisive steps and
this cost investment – as we have already announced – will constrain our
near-term profitability. We are also focusing our lower overall capital
expenditure more into our existing stores and in building our online
businesses. We are adapting our UK capital plans so that we have the right
store base for the future, to underpin the returns that create long term
value for our shareholders. Together these steps are the right things to do
both to improve the shopping trip for customers and to secure a return to
profitable growth in the UK.” Tesco issued its first profit warning in 20
years in January after suffering a disappointing Christmas sales period.
- Jamie Oliver will open his fifth Union Jacks restaurant in
London’s Covent Garden, it was announced today. The restaurant, which
debuted at Central St Giles in Midtown last year, will occupy a 3,500 sq ft
unit at the Market Building in Covent garden’s piazza. It will occupy two
floors in the north hall of the building, providing seating for 158 diners.
Oliver said: “The Piazza at Covent Garden is one of the most buzzing parts
of the city, with Londoners and tourists visiting all day and night. So this
Union Jacks needs to be special and it will be – the restaurant will look
fantastic.” Beverley Churchill, brand director for Covent Garden, said:
“Over the past few months Covent Garden has become London’s new foodie hot
spot attracting fantastic new concept restaurants such as Jamie’s Union
Jacks and international icons including Balthazar.”
- Swiss watchmaker Breitling has agreed a deal to open its first
standalone store on New Bond Street at what is expected to be a record rent
of £1m. The retailer will move into a store at 130 New Bond Street after US
retailer Diesel surrendered its lease to the private landlord. The
watchmaker is expected to open 6,000 sq ft store in the new year and is
understood to have agreed a deal with the landlord to return the first floor
of the building for office use. It is understood that Diesel, which has
traded on Bond Street since 2006, is now looking to open a 15,000 sq ft
store on Regent Street.
- Regional property services firms are to be given a much-needed
boost to fee income through the chance to advise the government on its
£280bn estate. The government is reviewing its prized Estates Professional
Services framework, which is worth millions in fees to the UK’s biggest
property services firms, as part of the prime minister’s drive to award more
government contracts to small and medium-sized businesses. The framework is
to be retendered in September and officials at the Government Procurement
Service have held a series of meetings with incumbent firms to discuss the
shake-up. GVA, DTZ, Drivers Jonas Deloitte, Jones Lang LaSalle, Colliers,
Lambert Smith Hampton, Knight Frank and BNP Paribas are the incumbents,
- although GVA, DTZ and Drivers Jonas Deloitte are thought to carry
out more than 80% of the work. A Cabinet Office spokeswoman said: “The
current framework is due to expire in September, so the time is right to
review it and make sure that it is delivering the expertise the public
sector needs at the right cost, as well as supporting innovation and
simplifying processes. “The Government Procurement Service is now reviewing
the framework and engaging with the property industry as part of this
process. The government has been clear that opening up its contracts to SMEs
is a priority.” GVA carries out around 46% of the work and boasts the
coveted position as sole property adviser to the Ministry of Defence. It is
understood to earn more than £6m a year in fees from the framework. Among
the options being mooted is a split of advisory and transaction work, so
less substantial transactions can be pooled for which regional companies can
pitch. Other options are to split frameworks into smaller pieces, divided by
region, or maintain a core roster of eight to 10 companies, which will be
forced to abide by a threshold of jobs that they must subcontract to smaller
firms. The Estates Professional Services framework is a list of
“pre-approved providers” public sector bodies use to manage their estate.
Bodies ranging from central government departments and local councils to the
emergency services and the NHS use the framework to procure work, tasking
firms with cutting the estate’s £25bn-a-year running costs. “Anyone who
isn’t losing sleep about failing to get on a framework of this size at the
moment is crazy,” said one agent. Prime minister David Cameron announced a
series of measures to help small firms compete for billions of pounds of
government contracts in February, and said the aim was to give businesses
greater access to the bidding process by eliminating “excessive bureaucracy
and petty regulation”. Long-term departmental contracts, such as the
Ministry of Justice’s five-year north of England property management
contract, which GVA won a year ago, will be unaffected, and the new rules
are to be applied following retendering in September.
- UK private sector improves in March. This week saw the release of
the March Purchasing Managers’ Indices (PMI) - a key survey of private
sector activity. The UK’s services, manufacturing and construction sectors
all showed improvement. The manufacturing sector gave the highest reading
since last May and the construction sector rose to the highest level since
October 2007. Most importantly the services PMI rose from 53.8 to 55.3 (a
reading above 50 signals expansion), which is in line with the historical
average and points to a decent pace of expansion within the sector. The
surveys suggest that the UK economy rounded off Q1 on a positive note and
economic contraction over the quarter is increasingly unlikely.
- Weak output figures are at odds with improving survey data. UK
manufacturing output fell 1.0%m/m in February after a 0.3%m/m drop in
January. This is the largest fall in 10 months. In annual terms production
fell 1.4% compared to February 2011. Production data can be volatile and are
frequently revised, but it’s odd that it differs so much from the PMI. The
PMI is more forward looking so hopefully the improved data translates into a
better manufacturing output figure in March.
in Q1 2012 was £7.53 billion, down 27% on the same period for 2011. Central
London office investment broke £4 billion for the quarter – the highest
figure since the financial crisis. Overseas investors spent £3 billion
during the first quarter – representing 42% of all purchases. Retail
investment fell from £3.15 billion in Q1 2011 to £1.42 billion in the latest
quarter
- Hedge funds are increasingly looking outside the traditional
locations of Mayfair and St James’s for London offices, according to new
research by Jones Lang LaSalle, but the West End still remains their
preferred location. JLL research published this week, called “Hedging the
Risk”, said the location preferences of hedge funds had “expanded”, and that
they would look further afield to north of Oxford Street – pushing prime
rents in the area to record-breaking levels. The report said hedge funds,
which have traditionally been comfortable paying rents of £100/sq ft or more
because of their high margins and low staff numbers, were now also
considering prime buildings in Knightsbridge, as well central London “Trophy
Buildings” such as the Heron Tower and The Shard. Nonetheless, the report
confirmed that the West End was still the number one destination for hedge
funds in Europe, and said rents would increase in the area, primarily due to
the lack of space available. Andrew Barnes, director in Jones Lang LaSalle’s
West End agency team, said: “There has been a definite change in where hedge
fund managers will consider looking, with some now prepared to consider
alternative locations to keep occupational costs in check, particularly if
the building has a high profile. However, for some, Mayfair will always
remain the premier choice despite costs.”
- Barratt Homes, Taylor Wimpey and the London Development Agency
have been given the green light for the final phase of their 780-apartment
scheme next to London’s Thames Barrier. At a Newham Council meeting on
Tuesday night the developers were given planning consent for the fifth phase
of the Barrier Park East development, also known as Waterside Park. The
fifth phase comprises 192,000 sq ft of residential space across 193 flats as
well as 4,250 sq ft of commercial space and a 1,550 sq ft crèche. Consent
was granted following issues previously raised by the Newham council over
layout, appearance, scale access and landscaping. A report before the
council on Tuesday said the council’s concerns had been alleviated. Barrier
Park East, located in Newham’s Royal Docks, was first given outline planning
approval in December 2009. It comprises 780 homes as well as retail, leisure
and community uses. Occupation of homes in the first phase began in December
last year and the second phase, Connaught House, is complete and occupied.
The third phase, Meadow View, will be available for occupation at the end of
this year and fully complete in February 2013. The whole scheme is due to be
completed by March 2016.
- William Hill confident as profit rises 19%: (WILLIAM HILL IS A
TENNANT IN OUR ALDERSGATE PROPERTY INVESTMENT IN LONDON - NICO) William Hill
said that it was “confident” of its prospects for the year ahead, as it
announced that operating profits rose 19 per cent in the first quarter,
fuelled by high margins in its retail business and the growing popularity of
online betting. With smartphone use on the rise, the company’s Sportsbook
mobile app was downloaded 190,000 times from the Apple App Store during the
quarter, bringing William Hill around 57,000 new customers, and helping its
online division to post £38.3m in operating profits, up 29 per cent on the
year before. Ralph Topping, chief executive, said that he was “pleased” with
the results. “Our investments in marketing and innovations continue to
deliver benefits, with our Sportsbook exceeding £50m in turnover in a single
week for the first time during the quarter and mobile turnover reaching
almost £11m in a single week,” he said, adding that the success of the
company’s online operations highlighted the importance of its multi-channel
offering. Operating profits from the group’s retail operations were up 8 per
cent, as gross win margins rose from 18.1 to 19.4 per cent, thanks in part
to a string of bookmaker-friendly football results. Analysts at Investec
said they were upgrading their earnings forecasts for William Hill following
the announcement, and described its margin performance as “exceptional”.
“The 220 bps margin outperformance versus Ladbrokes is eye-catching (19.4%
vs 17.2%) and, we think, reflects a higher proportion of football wagering
at William Hill (higher underlying and first quarter seasonal margin than
horseracing) and a superior trading operation,” they wrote. Ladbrokes, a
rival UK-based bookmaker, said on Thursday that its operating profits rose
by 3.9 per cent in the first quarter. Shares in the company, which have
risen 35 per cent this year, were up 3.19 per cent at 275.3p in early
morning trading in London, a level not seen since 2008.
- IMF sees banks deleveraging by $2.6tn: A drastic contraction of
European bank balance sheets during the next 18 months could jeopardise
financial stability and economic growth in Europe and beyond, according to
forecasts from the International Monetary Fund. In its Global Financial
Stability Report, published on Wednesday, the fund warned that European
banks looked set to shrink their balance sheets by $2.6tn (€2tn) over that
period. Unless officials improved their policy response, the IMF said,
European banks would dump almost 7 per cent of their assets by the end of
next year. The IMF expects most of the deleveraging to come from sales of
securities and non-core assets. However, it also sees credit supply
shrinking by 1.7 per cent as banks rein in lending to businesses and
households hitting the broader economy. After examining the efforts of the
continent’s 58 largest banks to boost their capital ratios, shed
unprofitable businesses and cut their reliance on wholesale funding, the
fund’s analysts predicted the deleveraging process would be more severe than
previously anticipated. While acknowledging that balance sheets needed to
shrink after the financial excess seen in the run-up to the crisis, the IMF
warned that the risk of a “synchronised and large-scale deleveraging” could
spark financial instability and hit economic growth. “The highly uncertain
European policy backdrop is driving banks to keep shrinking, even if we
avoided a disorderly and abrupt crunch,” warns Huw van Steenis, banking
analyst at Morgan Stanley. The fund said better policies – such as a
consideration of more easing by the European Central Bank and further
structural reforms, as well as progress on bank restructuring and resolution
– would prompt a smaller, 6 per cent contraction in banks’ balance sheets,
which would boost euro-area growth by 0.6 per cent. IMF assessments assume
the bulk of deleveraging will occur through the form of asset sales, rather
than a drop-off in lending. Andrea Enria, chair of the European Banking
Authority, said earlier this month less than 1 per cent of the deleveraging
represented true cuts to lending. The IMF also vindicates the EBA’s
controversial call for banks to hold at least 9 per cent capital by finding
evidence that higher equity buffers and capital ratios boosted banks’ share
prices. “Banks with higher tier one capital outperformed other sample banks
during the European sovereign debt crisis,” it said, adding that a 1
percentage point increase in a bank’s capital ratio during the past two
years added 0.5 per cent to monthly stock returns. Elsewhere in the report,
the fund warned of the risks presented by an ever-decreasing stock of “safe”
assets. “The number of sovereigns whose debt is considered safe is declining
– taking potentially $9tn in safe assets out of the market by 2016, which is
roughly 16 per cent of the projected total.” It expects this trend to
inflate prices for the few remaining assets deemed to be safe.
- Tesco announced it will reduce new net space growth by 38% and
spend £1bn revamping its existing estate in a preliminary results statement
released this morning. (TESCO IS ALSO A TENNANT IN OUR ALDERSGATE PROPERTY
INVESTMENT IN LONDON AND WAS ALSO IN OUR SHEFFIELD RETAIL ACQUISITION WHICH
NETTED INVESTORS AN IRR OF 101% - NICO) The supermarket giant reported a
1.6% rise in underlying pre-tax profits to £3.9bn for the year to February
25, 2012. Group sales went up 7.4% to £72bn. A store refurbishment programme
will start this year as part of a £1bn commitment to improve the Tesco
shopping experience for customers. The programme will start with 430 stores,
which will see warmer colours, better lighting and a stronger emphasis on
fresh food. This includes around £400m of capital investment and will focus
on service, store formats, pricing, range and rolling out click and collect.
However, the company said overall group capital expenditure would be lower
this financial year, down from £3.8bn in 2011/12 to £3.3bn in 2012/13,
mainly driven by the reduced new store opening programme in the UK. Profits
from the UK business were down 1% for the period to £2.5bn, as customers
continued to be squeezed by falling incomes and high petrol prices. Chief
executive Philip Clarke admitted that investing more into the UK store
estate would affect profits in the short term. “These are decisive steps and
this cost investment – as we have already announced – will constrain our
near-term profitability. We are also focusing our lower overall capital
expenditure more into our existing stores and in building our online
businesses. We are adapting our UK capital plans so that we have the right
store base for the future, to underpin the returns that create long term
value for our shareholders. Together these steps are the right things to do
both to improve the shopping trip for customers and to secure a return to
profitable growth in the UK.” Tesco issued its first profit warning in 20
years in January after suffering a disappointing Christmas sales period.
- Jamie Oliver will open his fifth Union Jacks restaurant in
London’s Covent Garden, it was announced today. The restaurant, which
debuted at Central St Giles in Midtown last year, will occupy a 3,500 sq ft
unit at the Market Building in Covent garden’s piazza. It will occupy two
floors in the north hall of the building, providing seating for 158 diners.
Oliver said: “The Piazza at Covent Garden is one of the most buzzing parts
of the city, with Londoners and tourists visiting all day and night. So this
Union Jacks needs to be special and it will be – the restaurant will look
fantastic.” Beverley Churchill, brand director for Covent Garden, said:
“Over the past few months Covent Garden has become London’s new foodie hot
spot attracting fantastic new concept restaurants such as Jamie’s Union
Jacks and international icons including Balthazar.”
- Swiss watchmaker Breitling has agreed a deal to open its first
standalone store on New Bond Street at what is expected to be a record rent
of £1m. The retailer will move into a store at 130 New Bond Street after US
retailer Diesel surrendered its lease to the private landlord. The
watchmaker is expected to open 6,000 sq ft store in the new year and is
understood to have agreed a deal with the landlord to return the first floor
of the building for office use. It is understood that Diesel, which has
traded on Bond Street since 2006, is now looking to open a 15,000 sq ft
store on Regent Street.
- Regional property services firms are to be given a much-needed
boost to fee income through the chance to advise the government on its
£280bn estate. The government is reviewing its prized Estates Professional
Services framework, which is worth millions in fees to the UK’s biggest
property services firms, as part of the prime minister’s drive to award more
government contracts to small and medium-sized businesses. The framework is
to be retendered in September and officials at the Government Procurement
Service have held a series of meetings with incumbent firms to discuss the
shake-up. GVA, DTZ, Drivers Jonas Deloitte, Jones Lang LaSalle, Colliers,
Lambert Smith Hampton, Knight Frank and BNP Paribas are the incumbents,
- although GVA, DTZ and Drivers Jonas Deloitte are thought to carry
out more than 80% of the work. A Cabinet Office spokeswoman said: “The
current framework is due to expire in September, so the time is right to
review it and make sure that it is delivering the expertise the public
sector needs at the right cost, as well as supporting innovation and
simplifying processes. “The Government Procurement Service is now reviewing
the framework and engaging with the property industry as part of this
process. The government has been clear that opening up its contracts to SMEs
is a priority.” GVA carries out around 46% of the work and boasts the
coveted position as sole property adviser to the Ministry of Defence. It is
understood to earn more than £6m a year in fees from the framework. Among
the options being mooted is a split of advisory and transaction work, so
less substantial transactions can be pooled for which regional companies can
pitch. Other options are to split frameworks into smaller pieces, divided by
region, or maintain a core roster of eight to 10 companies, which will be
forced to abide by a threshold of jobs that they must subcontract to smaller
firms. The Estates Professional Services framework is a list of
“pre-approved providers” public sector bodies use to manage their estate.
Bodies ranging from central government departments and local councils to the
emergency services and the NHS use the framework to procure work, tasking
firms with cutting the estate’s £25bn-a-year running costs. “Anyone who
isn’t losing sleep about failing to get on a framework of this size at the
moment is crazy,” said one agent. Prime minister David Cameron announced a
series of measures to help small firms compete for billions of pounds of
government contracts in February, and said the aim was to give businesses
greater access to the bidding process by eliminating “excessive bureaucracy
and petty regulation”. Long-term departmental contracts, such as the
Ministry of Justice’s five-year north of England property management
contract, which GVA won a year ago, will be unaffected, and the new rules
are to be applied following retendering in September.
- UK private sector improves in March. This week saw the release of
the March Purchasing Managers’ Indices (PMI) - a key survey of private
sector activity. The UK’s services, manufacturing and construction sectors
all showed improvement. The manufacturing sector gave the highest reading
since last May and the construction sector rose to the highest level since
October 2007. Most importantly the services PMI rose from 53.8 to 55.3 (a
reading above 50 signals expansion), which is in line with the historical
average and points to a decent pace of expansion within the sector. The
surveys suggest that the UK economy rounded off Q1 on a positive note and
economic contraction over the quarter is increasingly unlikely.
- Weak output figures are at odds with improving survey data. UK
manufacturing output fell 1.0%m/m in February after a 0.3%m/m drop in
January. This is the largest fall in 10 months. In annual terms production
fell 1.4% compared to February 2011. Production data can be volatile and are
frequently revised, but it’s odd that it differs so much from the PMI. The
PMI is more forward looking so hopefully the improved data translates into a
better manufacturing output figure in March.
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