The former Head of European Strategic Partnerships at LaSalle Investment Management Brett is an expert in institutional investing as well as global client services. Also according to the news, one big reason for CBRE creating this new role was the large proportion of commercial investment across the EU in 2012, as well as the percentage of Asian and other offshore investors engaging the London market. Concerning Brett’s new position, Simon Blake, Head of Capital Markets, UK, CBRE had this to offer:

“While global real estate investors continue to acknowledge London as one of the most liquid, stable and prestigious markets, they are now also turning to opportunities across the UK and in other key European markets. This interest is being driven by improving confidence in real estate as well as the emergence of new investors with a wider range of return requirements. Chris’ arrival at our firm will allow us to further strengthen our relationships with these investors and enhance our ability to provide all our clients with the highest levels of service and advice in the market.”

For those unfamiliar, CBRE Group, Inc. (NYSE:CBG) is a Fortune 500 company headquartered in Los Angeles. The world’s largest commercial real estate investment firm, the company employs some 37,000 plus professionals in 300 offices worldwide.

For more information about this news, or about CBRE, please visit the links above, or contact Jonathan Tutton – UK Communications Manager, CBRE at:  +44 (0) 2071823337

UK looks to stimulate house building. Courtesy vividBreeze

Although Brian Berry, chief executive of the FMB feels the UK government sees the economic benefits that can be brought about by boosting the construction sector, he also thinks it needs to do more to realize this potential. Berry is quoted as saying:

“Our members are ready to help Britain build its way back to growth. In the process helping meet the spiraling housing crisis and improving energy efficiency in homes and businesses. But we can’t do this alone. The government must meet construction firms halfway, and find imaginative new ways of increasing activity in the sector, particularly for small, local builders who may not immediately benefit from major infrastructure investment.”

Berry sees one way forward as being reducing VAT on the energy efficiency improvements to just 5%. He points out that doing so would enable homeowners to improve insulation, fit more efficient boilers and high-performance glazing. In addition Berry thinks UK ministers and local authorities should look at ways of bringing more housing online. This may mean releasing additional land for development, or refurbishing derelicts or empty stock. He added that:

“Easing planning red tape and pushing investment through the new Business Bank will help smaller construction companies begin to start providing the 250,000 new homes Britain needs every year just to keep pace with demand.”

Last week the FMB released its latest State of Trade Survey, and the results make mixed reading. The survey found that a lot of firms think they may have to introduce price increases, as the cost of overheads are eating into their profit margins too much. Wages and material costs are all expected to increase during the next six months. Just under a third thought they may have to lay off workers this year but at least unemployment levels are predicted to fall at a slower rate during the next six months. Although workloads are still decreasing, and the rate of contraction has slowed for housing sectors, it hasn’t done so in the non-residential sectors.

While overall data show an increase, there is a regional devide, with a higher increase for property asking prices in London (3.6%), the South East (3%) and the West Midlands 92.6%). At the other end of dropping asking prices are Wales with a 3.5% decrease, East Anglia (2.5%), the North West (1.8) and the Northern region (0.1%). The only Northern regions reporting an increase were Yorkshire and Humberside.

‘Those coming to market this month have taken a pragmatic pricing approach and kept their asking prices pretty much the same as sellers in December. Sensible pricing will help buyer affordability, one of the factors needed to help warm up the market and encourage a recovery from the credit crunch freeze in transaction volumes,’ said Miles Shipside, director and housing market analyst at Rightmove.  ‘The thaw will also be helped by growing confidence that prices are more likely to go up than down. There is an increasing body of evidence suggesting genuine green shoots of recovery after a prolonged period of the housing market bumping along the bottom.’

According to the newly released data, the weekly run rate for new properties listing in January was 11,153, 22% higher than last years value. While overall it is still down 37% compared to figures from before the credit crunch recorded five years ago, this is still the highest level in the beginning of a year since 2008.

‘While the number of sellers financially fit enough to come to market is still well down on pre credit crunch levels, there appears to be an increased willingness among those that can to give it a go. With Rightmove breaking traffic records, the chances of selling are on the up for sellers whose properties match the price, location and finish requirements of the greater numbers who are searching for a property to buy,’ explained Shipside. ‘Agents in many parts of the country report that the market remains patchy depending on where you live and what type of property you are selling. However, they are all consistent in noting that it is the best finished properties that are the most in-demand, especially as buyers do not have the spare cash to improve their new home so are hunting for the finished article.’

Rightmove’s latest data also showed that those who are going to put property on the market throughout 2013 are primarily driven by discretionary factors. 7 in 10 sellers are in this situation and not forced into the sale by factors such as the three Ds of death, debt and divorce.  Moderately greater mortgage lending might be in play for this year to support the increasing transaction volumes. According to the latest mortgage statistics released by the Bank of England, approvals were up by 3% from November 2011 to November 2012, the highest number of approvals recorded in November since 2007.

‘Those on the wrong side of the minimum deposit borderline are still marginalised, but those that have the funds and earning capacity to trade up will find some lenders offering fixed rate deals at their most attractive ever levels. Lenders are also courting buy to let investors as some areas offer a low risk combination of historically cheap purchase prices and attractive rental income. Rightmove research of professional landlords shows that 74% of those surveyed intend to buy and increase their portfolios within the next 12 months,’ Shipside explained further. ‘A further sign of market recovery is when investors look to property to achieve good returns. The majority of professional property investors appear to have spotted that now is the time to increase their investment, and they are obviously confident that prices are not going to get cheaper.’

While Rightmove comes with a bright forecast for property transactions and the real estate field in general for 2013, not everyone shares their enthusiasm. Nick Hopkinson, director of property company, PPR Estates, painting a very different picture.

‘Seller numbers, whilst up on last year, are still around half the numbers needed in a functioning market with an average of only 64 properties per agent in December 2012. Buyers still require huge deposits going into 2013. Typically they still average 20% according to the latest industry data and, of course, a perfect credit score remains essential for any borrowing. Also, potential buyers are not so easily excited about house prices and actual buying prices remain slightly down at best, excluding the London bubble, when you look at the most recent completion statistics,’ he said.

© Daniel Ernst – Fotolia.com

In December, 24% more surveyors across the UK predicted transactions would rise rather than fall over the next three months. At the same time prices held steady last month, and this is the first time since June 2010 that the national price balance hasn’t been negative. This year the RICS is forecasting prices will rise by 2%, and the market in certain areas of the country may have already begun to bottom out.

This new-found stability is predicted to continue, as surveyors are no longer taking a negative view of the price outlook over the next three months. This is the first time respondents to the survey haven’t predicted further price drops over the following quarter since the summer of 2010. The number of homes for sale is relatively stable, but demand from potential buyers is increasing. Last month 12% more surveyors reported an increase in new buyer inquiries, and this particular reading has now been in positive territory for four months. It’s no surprise to learn that prices in London increased significantly, while prices in Wales and the North East saw the largest falls. However prices in the West Midlands stabilized in December.

Peter Bolton King, RICS Global Residential Director said “As we start the New Year, confidence in the housing market does appear to be improving-helped in part by the impact of the Funding for Lending Scheme. Indeed, our members are predicting that transaction levels will continue increasing in many parts of the country. That said, more still needs to be done to ensure potential buyers can access the market at every level. Alongside this, there is still a clear need for more homes to be built.”

Overlook – courtesy Battersea Power Station Development Company (“BPSDC”)

The news tell of what will be the last riverside development in the city, an enormous project now selling the first phase known as Circus West. Agents will now be selling units to the Singapore and Hong Kong markets, according the news from Jones Lang LaSalle.

Residential and Development Director for the firm, Peter Murray, had this to say about the appointment of his company:

“We are thrilled to be associated with such a high profile and exciting iconic development and anticipate the development to be received with enormous success.”

The development will contain one, two, and three bedroom apartments, as well as; offices, shops, leisure and hospitality venues, not to mention some exclusive penthouses. The property’s design firm, Ian Simpson Architects and de Ryke Marsh Morgan (dRMM), have created smart architectural lines and function that will go from £338,000 for the studio apartments and range all the way up to £894,000 for a three bedroom apartments. The units are expected to be occupied some time in 2016. The image below shows a nice conceptualization of a part of the development.

The first phase of the project, eight core buildings to the West of the 39 acre site, will be complete sometime this year. The opening of these is slated to come along at the same time Europe’s largest brick building, Grade II listed Power Station’s renovation is complete. For those who do not know, this is the largest surviving example of Art Deco architecture in the world.

Extending the neighborhoods of Kensington and Chelsea, this vast and exclusive new neighborhood really transforms an industrial age unsustainable relic into homes and a community for the future. For those who talk about renewed developments, clearly this engaging new plan is a step above. With its own stage one station connecting Heathrow and Gatwick, boutique shopping galore, and a myriad outdoor and indoor entertainment array, it’s no wonder International sales teams were formed.

Those interested should visit the various websites mentioned, or connect via Twitter @Battersea_ICON with the developers.

The video below shows the vision.

Deloitte spokespersons also suggest their predictions may be seen as overly optimistic, but Anthony Duggan, partner and head of research at the firm, went on to clarify saying;

“We saw large downwards shifts in pricing during 2012 particularly for secondary stock. It appears these values are now getting close to a ‘mark to market’ level where investors begin to see some value and are willing to transact.”

Duggan went on to point out shortages in the Grade A quality stock, pricing barriers of ‘prime’ stock and ensuing entry levels, and an emergence of investment opportunity – widening of the UK investment market. The bottom line for the real estate economy in the UK, being similar to that in the US and EU – investor confidence will be key to any recovery. Given this bottoming out aspect, it seems fairly clear Deloitte’s predication make some sense.

For more information the reader should consult the original Deloitte release here, or contact:

Sue Gibson, Deloitte LLP, +44 (0) 20 7303 3156, or email her at: sugibson@djdeloitte.co.uk

For those unaware, the service sector in the UK accounts for fully three quarters of the economy there. Now, despite economic growth on the heels of the London 2012 Olympic Games, it appears final quarter numbers may negate the 0.9 percent gains of Q3.

More significantly than a simple quarterly downward shift, this report points to a more potentially concerning aspect of the UK economy, a possible underlying weakness that could fuel a massive inflationary problem. The associated PMI of 48.9 is actually a beacon or red flag for economists that indicates a possible endemic shrinkage. While some experts suggest this shrinkage is  a natural contraction because of London 2012, others suggest deeper underlying causes.

Chris Williamson, Chief Economist at survey compilers Markit said this in the report from CIPS:

“The first fall in service sector activity for two years raises the likelihood that the UK economy is sliding back into recession. The services PMI follows an equally disappointing construction survey for December, leaving manufacturing – which accounts for just 10% of the economy – as the only bright spot. Taken together, composite data from the three surveys posted its worst quarterly performance for three-and-a-half years, and are consistent with the economy contracting by approximately 0.2% in Q4.”

According to those surveyed, the outlook for the coming year seems pretty bleak, and such factors as the backlog of work declining, these indicate further the potential for the UK to slide back into deep recession. David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply added this to cap off the report:

“This tentative outlook was underlined by reports of weak new business pipelines and budget restrictions in the final quarter of last year, to ensure that activity posted its weakest quarterly performance in 2012.”

With real estate, financing, and construction all tied in to a healthy GDP in the UK. Just the real estate services businesses there account for an estimated value of some  £175 billion. Financials from the two biggest players in the UK real estate game, British Land (headed by Chris Grigg at right) and Peel Group (Peel Holdings), these do not show a thriving real estate industry at all. In fact, some suggest were it not for public funds, Saudi, and other backing, companies such as Peel would be a lot closer to the belly up position right now.

The first GDP numbers estimates for Q4 of 2012 are due from the Office for National Statistics on January 24th.

If nothing else, Foxtons can get some PR miles out of SM

A Sign of Real Estate Times

Let’s kick off this agency review with a bit of history. Foxtons was founded back in 1981 as a two person estate agency. Not a year later the firm sprang forward with a “zero commission” offer that pretty well shook up the market, as you might imagine. Expansions and openings go on until 1995 when Foxtons establishes their “lettings” magazine that helps Londoners connect on rentals. Then in 2001 the company opens their state-of-the-art headquarters followed by the fist so called “café-style offices” and their “Urban Grafitti Mini” subsequently. Today Foxtons simply has to be considered one of the most forward thinking and innovative property companies in the world.

Fast forwarding to today’s news and the opening this month of yet another Foxtons office, Shepherds Bush, makes for number 37 and 5 new ones this year alone. Talk about confidence in the market. For that news, let’s turn to Foxtons Chris Constantinou, Area Director for Foxtons West London:

“We have been looking after customers in Shepherds Bush for a long time now from our neighbouring offices in Notting Hill and Chiswick, which opened 31 and 20 years ago respectively. This has helped us to build a strong knowledge of the area, however, now seems an ideal time to focus on the local market in even more depth and serve the local community through an office on their doorstep.”

Are They Too Busy, Or What?

As the thinking suggests, Foxtons is obviously both proactive and reactive to market conditions surrounding their business. But let’s look at just how digital the company is. Their “neighborhood” approach to lettings, the cafe offices, and their award winning website are all signs of a company understanding what it takes to not only brand, but to serve 21st century customers. But there is a “but” here.

Foxtons landing page – cutting edge but unsocial

Real estate brokers in the United States, for the most part that is, are absolutely clueless about how to take advantage of the Internet. As we have seen time and time again, cities across the US are underrepresented by property companies at the local level. Apparently, the UK’s poster child for “local” buying, selling, and renting, has been too busy to care too. Aside the near perfect website above, and I do mean perfect, Foxtons does not even seem to have noticed the web. Before I go on, it’s only fair the reader knows just how superb Foxtons has been at making tools, visitors to their site can even search properties by “drawing” the desired area on the map search. Or, they can search by tube, school, and so on, someone spent a lot on this aspect.

Drawing your neighborhood to find a home.

Now the bad news. Foxtons evidently sees investing in Internet and social media branding or marketing as futile. They joined Facebook back in 2011, but have since done zero engagement. As for Twitter, I can find people who hate Foxtons, but not the agency that spends money driving around London in Mini Coopers. To be honest, I am not exactly sure what to think on this one. Even the most ditsy American out of  the trunk of his or her car operator is on Twitter?

Having landlord and tenant portals, online payments, even a convenient magazine app for iPad, Foxton not taking advantage of the power their agency possesses is almost criminal. Our readers can download Area at iTunes here, but for a company that has led in many ways the London letting and even sale market, being so far behind technically seems ludicrous.

You can apply for a job at Foxtons online (and they have many openings), you can find out the value of your home, you can even see advanced statistics about your particular area (image below), but if you want to interact with Foxtons, they are not listening unless you happen to visit them at their website (or at the office).

I won’t even go into the mobile aspect of real estate marketing here. While I so hate to offer up negatives for a company that clearly understands branding and innovation, Foxtons actually disappointed me. Google London rentals, and there Foxtons is in the SERPs. So how come Foxtons Security is the only profile I find on G+? Didn’t the company’s SEO guru explain how Google ranks G+ in the new algorithm changes?

Paradise and Revenue Lost – Never to Be Regained

Anyhow, for those agents out there wondering about my scathing reviews of American real estate companies, Foxtons is an international example of wasted potential. Two years ago such companies may have been justified in skepticism of social media and even mobile engagement efficacy, but not today. Companies can now prove out ROI for such marketing channels, and it’s only a matter of time before social makes or breaks competitors. Looking at Foxtons as a case, their ignoring the social channels is tantamount to ignoring billboards, or radio, or TV. The company may as well buy more Mini Coopers and pray. If you don’t believe me, ask Google.

In concluding, Foxtons has done a fantastic job creating a true value proposition both on the ground and with their cutting edge website. I have never actually run across a better site. However, the lost opportunity costs this company is currently seeing could probably fund many more office or even international expansion. The thing about “not knowing” is that lost revenues could be anything. Foxtons is this year’s Large Lettings Agency in the UK according to just about everyone. Imagine how much more they could do…

Hint. 

For the month of October the average seller asking price jumped some 3.5% (+£8,310). This was the largest increase in the last eight months according to the report. Reversing a price lull after London 2012, the October figures may indicate the market is not so negative as previously believed. However, Rightmove research goes on to suggest just a few segments are responsible for the trend.

Also, despite the positive news there is little reason to assume buyers will actually pay the higher price.

Data courtesy RightMove

Miles Shipside, director and housing market analyst at Rightmove, had this to add:

“This month’s jump of more than £8,000 in asking prices is partly an anticipated bounce after the Olympic-induced activity doldrums, though with all regions seeing increases it also provides evidence of some life in the market. The prospect of a few active selling weeks before the winter slowdown means estate agents are keen to attract fresh stock to try and land more buyers. However, this stock-building could backfire if they agree to over-ambitious pricing to please a seller, as it could curb a potential buyer’s enthusiasm to arrange a viewing if the over-priced alarm bell starts ringing.”

As a snapshot, the London areas of Kensington and Chelsea saw nearly 10% increase in monthly prices according to the research. Meanwhile Camden’s yearly increase in prices totaled some 14.7%. Again, prices do not necessarily indicate ultimate sales realizations, but the anticipation of a higher price is indicative.

Rightmove’s House Price Index is the most up-to-date monthly sample of asking prices in the UK. It monitors changes in prices annually and monthly to provide an overall comprehensive view of the market in England and in Wales. Overall, this news from Rightmove is highly positive as an indicator of potential, at least.

For those interested, the Rightmove study can be reviewed via this PDF.

A new Hammerson development – retail space

The CEO of Hammerson, David Atkins, elaborated on the move further:

“Following our investments in Value Retail, Victoria Quarter and the Whitgift Centre, this acquisition is another demonstration of Hammerson deploying capital into one of our three defined areas of retail focus. There is continued strong consumer demand for the ease and convenience of retail parks, and that consumer demand is being reflected in the increasing requirements of a range of fashion and catering retailers for space in retail parks. This portfolio acquisition on attractive terms enhances our income profile and will be actively managed to grow rents and capitalise on development opportunities, maximising returns for shareholders.

These moves by Hammerson appear to be part of a bigger trend in UK real estate to move investments into a more targeted space. Regional shopping and office space in and around London, being two areas Hammerson and others seem focused on. The so called Junction Fund is made up of shopping parks in Bristol, Glasgow, and Telford as well as retail giants like H&M, Gap and a few others.

The acquisition also speaks of undeveloped land as part of the deal, specifically the Oldbury Shopping Park Development. There, Hammerson has bought into roughly 16 acres of potential across the way from Oldbury town centre. That move along spell a ray of hope for industries tied to real estate development, namely the jobs sector.

For more information on this recent Hammerson investment, please visit the link provided or check out the firm’s Facebook profile for images.