Market Overview
July 2022
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With so many big news stories to choose from, we should feel lucky to have lots to talk about.
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However, when the main topics are war, strikes, higher interest rates following inflationary pressures and now a resurgent pandemic, the underlying theme is negative in the extreme.
If there is a positive to take from this backdrop, then might it be that we are starting to see a softening in some areas of the property market where prime yields are now looking unwise against a rapidly changing interest rate environment. As an investor we have felt priced out of what we would consider sensible risk adjusted returns for some time and the prospect of being able to re-enter over-heated markets is tempting. The series of events that we have all witnessed since March 2020, has failed to result in a meaningful fall in values and with the banks maintaining credit lines despite multivarious technical loan breaches, we have been waiting patiently for something to have the desired effect.
We’re not rubbing our hands together quite yet, but it’s an encouraging sign that the market might start to normalise and allow value managers to re-enter the market on reasonable terms. That would be a small and welcome concession whilst we navigate the other significant storms that are piling up on the horizon.
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PropSail 2022
We were delighted to sponsor a J70 boat at PropSail22 this year and the team had a great day out with clients and future clients! This event, like so many others, was postponed for 2 years and it felt like there was a lot of pent-up competitiveness waiting to be unleashed on the water. We were please to be placed 4th overall after an improving run of results starting with a 5th and ending with a 3rd in the final race of the day where we were beaten only by the event organiser (Jason Antill) and an ex-olympic sailor (Alice Masterman). Our crew included Matt Taylor from Brockton Everlast, who we are working with as asset managers on properties in London and Oxford. Matt was chief navigator and strategist. On the bow, we benefitted from the presence of Sam Resouly of Trinova Real Estate LLP, a well-regarded investment manager. Sam managed the trimmer and contributed ballast at the key moments.
The event brought out a diverse mix of consultants and owners and, after a 24-year hiatus since our last sail boat race, we’re planning to make PropSail an annual affair for QuoinStone Group.
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Results of LinkedIn Poll
What type of occupier do you think will be most negatively affected by the total withdrawal of business rates support from the government?
This was the question we asked on a recent LinkedIn poll, the results of which pointed strongly towards restaurants, cafes and bars. Lockdowns hit the High Street hard, however, many retailers were able to carry on making sales online and in some cases grow their businesses, while the leisure sector ground to a halt. Because of this, leisure occupiers felt the effects of the pandemic more than others and are continuing to rely on support from the government in order to stay open and trading. The shift in favour of working from home over coming into the office is also having a detrimental effect on the leisure sector, further keeping the pressure on these types of business into the future. What is clear is that there are winners and losers in any period of upheaval and with government failing to assist, these businesses need to manage their rates liabilities to minimise the impact to their bottom lines.
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Business Rates Savings Calculator
We have launched a helpful tool for landlords that enables owners and occupiers to look up the potential savings available in situations where their property is empty or undergoing works. This tool shows the potential saving we can achieve without needing to make an enquiry and allows owners to get a better understanding of the options available to them. Letting agents use the tool to advise their clients on what to do at the end of their rate free period, if the properties remain unlet and investment agents identify savings available to buyers. The tool is proving popular so please click here to run the calculator on your own properties.
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Is London Coming Back To Life?
We were pleased to be invited to a Tortoise Media event on the 14th June to debate the topic of London coming back to life post pandemic. There was much discussion around the exciting subject of investment into life science development, healthcare, the arts, culture and leisure and there is no doubt that there is a huge amount of capital investment planned for the city.
London remains a place to meet, work, play and be entertained although with inflation racing ever higher, a creaking infrastructure (let’s not mention the train strikes!) and housing costs at an all-time high, how do the workers either afford to live in or travel to London?
Despite the mass exodus of Londoners to the shires during the pandemic it seems as though many office workers are keen to get back into an office environment (and the bars and restaurants)! Could the answer to housing affordability be a flexi model similar to offices and/or a campus style environment as trialled by the likes of Google and Apple.
One thing we did ascertain is that there is still much to be excited about in London.
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Tim Struth MRICS
CEO
Tim is co-founder responsible for overall management, technology evolution and business strategy.
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Steve Howling MRICS
CIO
Steve is co-founder responsible for client networks & business growth. He leads on market penetration.
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Billy Struth
Senior Surveyor
Billy is responsible for business development. He leads on delivery of professional services and client liaison.
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