Planners cry foul over prime minister’s intervention In his enthusiasm to “build, build, build”
In his enthusiasm to “build, build, build”, Boris Johnson has riled the planning industry.
In an attempt to boost the UK’s construction and development sectors, prime minster Boris Johnson unveiled “the most radical reforms to the planning system since the Second World War” earlier this week. With characteristic ebullience, his so-called “build, build, build” speech announced an extension of current permitted development rights (PDR).
The proposals have been met with mixed-reactions from then industry, with many observing that the proposals are a minor tweaks of existing policy re-packaged as major reform. The housing sector has greeted it with cautious enthusiasm as a means of expediting the delivery of new homes, while remaining wary of a potential decline in standards in the absence of any dur process.
The Royal Town Planning Institute (@RTPIPlanners) has been one of the most vociferous critics of the new proposals, initially warning that “the whole point of PDR is to bypass planning for speed, efficiency and cheapness”. Its response escalated later this week, when the Institute penned an open letter denouncing the prime minister’s speech for blaming planners for putting the brakes on development. The letter points out that “the not-so-subtle attempt to tarnish the reputation of planners in order to pave the way for an overhaul of the planning system is dangerous to say the least.”
We can only hope, in his enthusiasm to get Britain building again, that the prime minister hasn’t unwittingly pitted the country’s planning authorities and development community against one another. As has been proven time and time again, the best development and placemaking opportunities are delivered when local authorities and developers work in a collegiate an collaborative way. It is unhelpful to criticise planners or developers for past mistakes or misdemeanours – as there are plenty of examples from both sides of the fence – and is instead more constructive to encourage better ways of working together. Removing planners from the process entirely is arguably not the best way of achieving this. The extension of PDR is one solution to rebuilding our economy and high streets, but granting some developers immunity for robust scrutiny is likely to yield unintended consequences.
As Hannah Quarterman, head of planning @HoganLovells puts it: “Support for building is generally always attractive…..but enthusiasm needs to be tempered by ensuring we are building the right things, in the right place, in the right way.”
The changing economic landscape post-COVID has challenged the development community to demonstrate its value and creativity and it is likely that the majority will use the opportunity – and the additional flexibility offered by recent planning reform – to do just that. And, as an industry, we shouldn’t be afraid to call out those who prove the exception to the rule.More
Will there be fireworks on July 4th?
4th July is usually synonymous with Independence Day in the United States; family gatherings, parties and fireworks. However, in England it has taken on a new significance. On Tuesday 23 July, Prime Minister Boris Johnson set out further changes to lockdown measures in England, enabling hospitality businesses to get back on their feet. This is all set to kick off on Saturday 4th July – provided that these businesses adhere to government guidelines, not least regarding social distancing.
In a sense we will experience some sort of independence, being granted the freedom to have socially distanced meet-ups at the pub and restaurants, and finally make that much-needed appointment at the hairdressers. It certainly seems like we’re returning to life as we know it. Though with new restrictions in place, we must ask ourselves, what exactly does the short term hold for businesses in the hospitality sector?
Joss Croft, chief executive of UKinbound said: “Although these measures are very much to be welcomed, government needs to recognise that while some businesses will hopefully be able to re-coup a small proportion of their losses over the much shorter summer season, many businesses, especially those that rely wholly or mostly on inbound tourism, will have gone through the equivalent of ‘three winters’ and will need further financial support if they are to survive and continue to drive jobs and growth across the UK.”
Everything about this pandemic has been unprecedented so it’s difficult to predict how much business pubs and restaurants will bring in with the consideration of social distancing guidelines. There are of course a number of factors favouring the return to growth for the hospitality sector; the warm weather, staycation tourists and the eagerness of customers to get back to some remanence of a normal life after months of lockdown.
Though the fact remains that we have not beaten this virus yet. With more freedom being granted to us it already seems that some people are taking it to the extreme. Health Secretary, Matt Hancock warned the government could close beaches if there is a rise in coronavirus cases after half a million people filled the beaches of Bournemouth this week, prompting the local council to declare a major incident.
Will there be fireworks to celebrate the safe reopening of pubs and restaurants, or will there be chaos similar to that which we have witnessed on our shores? We must have confidence that businesses are doing all they can to create safe places for the public – and hope that the public uses these spaces responsibly so that we can avoid a second wave and make it on this road of recovery.
Will property bounce back?
As the country emerges from lockdown everyone is hoping that the recovery will be swift, that normal life will return as quickly as possible, and we can resume our lives. Over the past few months more than half of the world’s population have been confined to their homes to combat the spread of Covid-19. The longer the confinement has gone on, the more people have been able to reflect on what they like and dislike about their homes. With lockdown easing, will the Property Market bounce back as people surge to satisfy their new needs?
According to Rightmove early signs show that the English property market is bouncing back. This means estate agents are now conducting in-person house viewings again and buyers are able to move home once more. Rightmove says traffic to its website returned to pre-lockdown levels on the day the market reopened, with 5.2 million visitors.
Since the Government reopened the property market last month, home-hunters have sprung into action and England is getting moving again. Their latest research shows that 40,000 new sales have been agreed since the market resumed on 13th May. The property listing platform recorded their 10 busiest ever days in May and June, with home-movers spending over 955,000 hours collectively online on 6th June. It remains to early to tell If this initial bounce will last, but Rightmove’s statistics cover 95% of the market do indicate far more resilience than had been expected.
London seems to be showing the most promising signs of life, as the virus moved more swiftly through the capital it is hoped the recovery will be faster too. Andy Shepherd, CEO of Dexters in London, said: “We’re tremendously busy across all of our 70 London offices. Transactions numbers are increasing daily, over the past two weeks we’ve agreed sales on over 250 properties and arranged lettings on over 600, so 85 a day or 10 an hour in the working week. Immediately before lockdown we’d seen the best market for five years.”
It’s not clear is the market across the rest of the country will recover as swiftly. The Scottish government has announced plans to reopen the property market, with First Minister of Scotland Nicola Sturgeon confirming that restrictions on home moves will be eased from Monday 29th June. So as yet, north of the border remains an unknown quantity.
When it comes to more up-to-date information, the picture remains unclear. Rightmove released its monthly asking price index without a headline figure in April and May, as it said there were too few properties being listed to provide a calculation. Whether these positive signs herald a strong, lasting recovery, much like house prices it is too early too tell.
-David Patterson, Account Manager, InnescoMore
Non-essential shops to reopen on Monday
Following a conversation between prime minister Boris Johnson and business secretary Alok Sharma last week, in which the former reportedly burst out “Christ!” when presented with the number of jobs at risk if the current Covid-19 restrictions continue, the UK is now firmly accelerating its way out of lockdown. On Monday, it was confirmed that all non-essential shops will be allowed to reopen as of next week. Several landlords, including Hammerson and Capital & Regional, have announced that they will indeed be reopening their centres on Monday, whilst many retailers have outlined the specific measures they are taking to ensure a safe reopening. These measure are in line with a set of detailed Covid-19 safety measures for retailers outlined by the government last month, which including limiting the number of people in stores and placing protective coverings on large items.
So, as we head to the shops for the first time since 23 March, what can we expect?
Retailers like IKEA and Marks & Spencer have announced that they will impose restrictions on the maximum number of customers in the stores at any one time, with IKEA saying it would have wardens patrolling aisles to ensure the two-metre distancing rule is observed. H&M will be enforcing safety precautions including separate entrances and exit queue systems when maximum safe capacity is reached and hand sanitisers throughout the stores. Boots have said it has installed Perspex protective screens at the checkouts, and that face-to-face beauty consultations will operate via video for the ‘foreseeable future’, whilst many retailers including John Lewis and H&M will keep fitting rooms closed until further notice. Returned clothes will need to be quarantined for 72 hours – and
Waterstones said this morning that it will use that same time frame to quarantine books that customers pick up but do not buy.
It is safe to say that shopping will be quite different from what we are used to. Many of us will miss the casual browsing of stores and the tactile experience of touching items and trying on clothes (which, after all, is one of the main advantages of physical retail versus the online shopping we have grown accustomed to over the past months). Still, the reopening of stores is an important step towards some sort of normality for our society, even if that normality is vastly different than the one we used to know.
And as for the retail industry? Earlier this week, Boris Johnson stated that this has been “the most challenging period for high streets and shops in our history” – and Monday will mark the beginning of the end to this most challenging period.More
Acceleration of real estate fundraising marks recovery
Seismic shifts in the real estate sector since the outbreak of Covid-19 have sent businesses into overdrive, surely covering a decade’s worth of work and change in order to adapt to the new landscape carved out by the pandemic. The result has been an acceleration of industry trends at every level.
We have seen immediate consumer trends hastened by the direct impacts of lockdown measures, such as the rise in online shopping and shift to the digitised workplace. At a higher level we are also witnessing an acceleration of institutional fundraising and consolidation of capital among fund managers – which in terms of kickstarting the global real estate sector after a prolonged period of pause, is certainly worth our close attention.
Capital raising for real estate funds hit a new high of $151bn in 2019, overtaking volumes seen in 2008 when the global financial crisis started. Despite this, the number of vehicles reaching a final close in 2019 declined sharply, marking a 39% drop on the previous year. Real estate funds were getting larger, with the average size reaching $625m. The three largest funds raised $43.5bn between them, including the $20.5bn Blackstone Real Estate Partners IX, the largest real estate fund in history.
Recent months have shown concentration among the largest fund managers is greater than ever as a result of Covid-19, as Brookfield Asset Management and Blackstone Group Inc., the world’s two biggest investment funds, eye up opportunities as distressed debt grows.
In April this year, Blackstone finished raising a $10.7 billion fund to target European real estate, just as the Covid-19 outbreak began to take hold of global markets. Yesterday it was announced that Blackstone had tightened its grip on the crown of world’s largest real estate manager for a fourth consecutive year after property assets controlled by the New York-listed group surged to nearly €250bn. Similarly, in May, Brookfield Asset Management, the Canadian investment group and now second in line to the throne after Blackstone, launched a $5bn rescue fund for retailers that need extra capital to weather the headwinds of coronavirus.
Additionally, just yesterday, France-based Primonial launched its open-ended European real estate fund, targeting £1bn of social infrastructure assets, primarily healthcare real estate as well as some educational and affordable housing properties.
These new funds aren’t to be taken lightly – they represent huge commitments of capital to global real estate, and that’s not to mention the many smaller and medium-sized managers that will be looking to capitalise on more opportunistic deals as assets are revalued, with a view to building scale and expanding their geographic footprint as others take a more watchful approach.
It’s been a long 11 weeks for real estate in the UK since lockdown measures were introduced – and indeed even longer for businesses in Europe and further afield. Though in such a close-knit global industry, as we continue to see major funds play their hand, we must believe that things are looking up; that new investments are on the horizon, and that we will see an increasingly granular level of new projects emerging in the near future.
Give high streets the flexibility to innovate
After ten weeks of shuttered shops – and another couple to go – an invisible revolution is about to make itself seen. What proportion of the new lockdown-driven online sales will return to bricks and mortar outlets is the $64,000 question, and the signs, it has to be said, aren’t good.
The shift to online was, of course, the biggest trend in retail long before coronavirus made its unwelcome arrival, but the lockdown has accelerated the changes to a remarkable degree. Internet retailing milestones that were expected to be hit in five or even ten years’ time are now par for the course across much of the sector.
If a smaller high street with fewer shops was inevitable over the long term, that horizon has been brought forward to now. It makes sense to get to work – and quickly – on figuring how best to embrace this new future.
There are a host of challenges created by the resizing of the high street. Many of these – current leases, the structure of future ones, the debt held against the properties in question – can only be resolved by the application of time and some frank conversations between retailers, landlords and their bankers. But as the latest thinking from property consultancy Gerald Eve has shown, there is plenty the Government and local authorities can do to make the transition as straightforward as possible; best of all, it won’t cost the public purse a penny.
Use classes have for many years been an arcane and, let’s be honest, slightly boring part of the planning process, limiting what properties can be used for what business activity. Main thoroughfares were for shops (“Class A1”), and the use restrictions reflected this.
Online retail was already turning this received wisdom on its head, but as high streets reinvent themselves, the use class system should be urgently reformed to oil the route from shopfloor to an alternative use.
And this isn’t just about shops and restaurants. Anecdotally, there is plenty of evidence that innovators in the space are focusing on malls rather than high streets, as it means dealing with just one interested party rather than the web of planning authorities, landlords, business improvement districts and community groups that oversee town centres. Innovation in malls should not be stymied, but it should not be prioritised over the high street, as the current situation does.
The high street is undergoing a painful transition, and despite the acceleration caused by the lockdown it will be many years before a new, viable model fully emerges. But the current use class system is an additional and unnecessary hurdle that the formats of the future have to vault; some more flexibility in what is allowed where would help keep this painful period as short as possible.More
‘Corporate behaviour matters now more than ever. Reputations will be won and lost in the battleground of Covid-19’
It is often said that in times of crisis we see both the best and the worst of people. For every local café owner delivering free meals to the vulnerable, there is a con artist seeking to gain from the chaos and confusion around us. This trend is amplified in the corporate world, which is divided into those who have sought to exploit the Covid-19 pandemic to their advantage and those who have used their resources as a force for good.
A particularly dispiriting story in today’s Telegraph reveals a growing number of companies that have abused the UK’s much-lauded furlough scheme, while there is plenty of anecdotal evidence of employers insisting staff return to work despite being unable offering inadequate safety provision. Even if there is insufficient legal recourse for those who have played the system, it is unlikely that they will emerge with the reputations intact. As we all share in the pain of Covid-19, companies must work harder than ever to earn and maintain the trust of consumers and employees.
In an editorial today, the @FT argues that now is the time to emerge as a “saint rather than sinner”. The article states that the global pandemic has forced an abrupt rethink of responsible capitalism and that the businesses to emerge from it stronger will need to embrace environmental, social and governance issues with more commitment than ever.
Kimberly Lewis, director of engagement at global investment house @FederatedHermes says “A company’s actions in a crisis are the epitome of determining what its business purpose is. Companies can decide to react ethically and put society more broadly before potential short-term profits.” Her own conversations with executives will centre on how they treat their staff and suppliers, and in some cases how effectively they retool operations to help health services and governments respond to coronavirus, she says.
The real estate media has played a vital role during this pandemic in encouraging good behaviour and holding the industry to account. Both @PropertyWeek and @EstatesGazette this week called for a ‘kinder’ industry in recognition of #MentalHealthAwarenessWeek and are actively encouraging us all to use this opportunity to emerge from this crisis as a kinder, more responsible and more inclusive industry. Those who embrace this change are likely to ultimately emerge stronger, more trusted and better respected.
Simon Stretch, Director, Innesco
Back to “normal” life back to reality?
THE BIG PICTURE: ‘Back to “normal” life back to reality?’
This week has seen the first major shift in our living arrangements since lockdown began seven weeks ago as the Government eased measures on Wednesday. We’ve have been given permission to return to work if we working from home is not an option and some pupils may be able to return to school from the 1st of June it is hoped. So life is returning to normal, right?
It seems so. It was a happy surprise that estate agents were able to re-start in-person property viewings. Prior to Prime Minister Boris Johnson’s announcement easing lockdown on Sunday evening, the property industry’s future was unclear as they waited for the new guidelines to be approved by the Government.
As the industry restarts, safety remains paramount and it is compulsory that homebuyers and renters wear face masks and gloves during viewings. In order to conduct a safe viewing all doors have to be left open to reduce the risk of infection and buyers and renters are advised not to touch surfaces. In addition, if agents sense or suspect anyone has a cough or infection they are allowed to refuse entry to the individual(s).
There are clearly a number of things to take into consideration before and during a viewing. It appears that as we attempt to regain some normality things maybe far from usual for some time. Formerly simply activities now carry with them detailed safety procedures and guidelines.With in-person activities still encumbered it is likely that virtual viewings will remain part of the property landscape for some time to come. Has locked down changed out mindset? Are we now afraid of readjusting and returning to normal life?
According to Guardian columnist, Polly Toynbee, we should be concerned that estate agents have been put at the heart of the British economy.
“Off we go again, restarting an economy built on the quicksands of ever-inflating property wealth. After the crash of 2008, quantitative easing accelerated investment in already existing bricks and mortar, at the expense of falling investment in industry or anything else that might fuel our dismal productivity growth.”
That maybe, but the industry isn’t prepared to wait. With tens of thousands of sales frozen when lockdown was imposed so it’s no surprise that agents have gone back to work. “Dexters opened its 70 London offices on Wednesday by appointment and is now offering viewings. Knight Frank is now arranging viewings and market appraisals and will reopen its offices on Monday. Winkworth will start viewings again today and will also reopen its offices on Monday.”
For now, we must do all we can to stay safe while doing what we can to get back to work.More
Do you believe in life after lockdown?
As the end of week 7 in lockdown approaches, we all sit in eager anticipation for the Prime Minister’s press conference on Sunday where he is expected to update the nation on current and future restrictions, how these might be eased and indeed how these might even be tightened. In all likelihood we will see a slight loosening of the rules governing how we behave outside, some businesses will be allowed to resume trading and small-scale social activities may even be permitted once again. However, with #KeeptheLockdown trending on twitter this afternoon there it is clear that the public remain anxious about how quickly we will leave lockdown and how we can avoid a return to total quarantine should the virus peak a second time. For businesses eager to start trading the question remains, will there be life after lockdown?
People are understandably nervous about what is to come but with a sensible dose of caution and common sense there is no reason that the nation can’t start to get back to work and back to a semblance of “normal” life. The Government will be doing all it can to control the return and measures will be eased one at a time, to allow the effects of each to be closely monitored until the experts are satisfied more changes can be made. As one cabinet minister put it: “The messaging will evolve from stay at home to be careful when you’re out… There will be a cautious easing of some of the restrictions and an outline of the route back to something closer to normality, rather than everything suddenly going back to normal.” It will not be an overnight change, progress will be gradual and is expected to take from May till October.
Although there have been multiple reports about non-essential shops like gardening centres re-opening, the Prime Minister is not expected to change the rules on other retail yet – although chains like B&Q have already reopened some stores. Retailers that are currently trading have taken measures outside and inside stores, introducing plexiglass screens at tills and limiting numbers both in store and in socially-distanced warehousing operations. The British Retail Consortium has submitted a report to Government recommending that if non-essential shops reopen, changing rooms should stay closed and in-store seating and services – such as advice, personal shopping or nail bars – should be limited.
Similarly, a staged return to normal will be seen in many other sectors. Office based employees who can continue to work from home will be advised to do so. Employers are expected to be instructed to implement staggered arrival and departure times for those who have critical roles in business or who cannot work from home – with workers advised to use the stairs instead of lifts. The boom for zoom and similar platforms will continue as the Government continues to recommend that meetings take place remotely where possible.
Whatever change comes from the statement on Sunday, the Prime Minister says the Government will proceed with “maximum caution” when considering easing coronavirus restrictions. There certainly will be life after lockdown, it just might take us a little longer than we might otherwise wish to get there.
The way we work: COVID and the future of the corporate headquarters?
That the world’s professional services, financial services and creative industries are being run from bedrooms, kitchens and home offices across the globe is testament to both technological infrastructure and workforce flexibility. A scenario that would have been unthinkable a decade ago has today been accepted as a new norm in the face of a huge global shockwave.
This resilience has, understandably, led to questions over the future role of the workplace with many experts predicting the demise of the traditional office as we know (or, knew) it. In an article in The Guardian this week, Jes Staley, the chief executive of @Barclays said the bank would look at a more de-centralised approach to staff working, including the prospect of local branches becoming satellite offices for more employees. “I think the notion of putting 7,000 people in a building may be a thing of the past”, he said, before explaining that it was likely that bank branches would be utilised to create an extended office network from which investment bankers, corporate advisors and call centres might work on an ad-hoc basis. He added that “it is absolutely remarkable that Barclays, a bank with £1.4bn on its balance sheet, is functioning with the vast majority of its staff working from home”.
If a vast corporate occupier with 80,000 staff can function for an extended period with a home based workforce, do question marks exist over the need for the traditional flagship head office building? With advisors such as @CushWake and @JLL launching dedicated COVID related corporate real estate services, it would appear that many major occupiers are giving serious consideration to their future approach. Some office market bulls predict that the ongoing need for social distancing could translate into occupiers needing even larger footprints to accommodate their staff, although this would seem to many an overly optimistic outlook in an era that is likely to see businesses rushing to reduce their exposure to real estate costs.
They key to finding the right corporate real estate solution surely comes down to a detailed understanding of the workforce. No business can treat its workers as one homogenous entity and all have differing needs in terms of working environment, commute, social contact and responsibilities outside of work. As @BritishLand boss, Chris Grigg, explains in an article today’s @FT, “There is a danger of groupthink. You have to bear in mind that there are some people struggling to juggle childcare or home schooling with their day job, and more junior colleagues who are sharing flats who think this is nothing short of a nightmare”.
While the enforced global home working experiment may have surprised us all, it is likely that the best future solutions will come from a human perspective rather than a purely bricks and mortar perspective. Taking people into account, it is likely that most organisations will draw similar conclusions: that a central “hub’ for collaboration and brand identity, supported by a range of more flexible solutions – including “satellite” locations and home working options – is likely to offer the best blend of solutions for both staff wellbeing and business continuity.
With renewed confidence in remote working infrastructure and (hopefully) a decline in the presenteeism culture, the best occupiers will adapt their strategies accordingly, while the best landlords will respond with innovative products and solutions that fit the needs of the post-COVID working world. More