International real estate advisor Savills has highlighted four key opportunities for investors seeking higher yielding assets as capital growth in the commercial property market slows down.  With average returns expected to fall from 14% in 2015 to 8% this year, the firm points to small lot sizes, Scotland, high street retail outside of London and urban logistics as offering the best spread to other asset classes.  Savills analysis of deals by lot size found that assets in the £5-15 million bracket delivered the highest yields across retail, offices and industrial, with a spread to other lot sizes of between 50 and 200 bps.  The largest yield gap is for offices, which currently offer 7.37% for assets between £5-15 million compared to 5.08% for assets over £100 million.  In Scotland, the commercial markets missed out on yield hardening seen in England during the referendum campaign of 2014.  As a result, all sectors there offer yields circa 70-150 bps higher than in comparable English cities.  For offices in prime cities, investors can expect a 5.32% yield in Scotland compared to 4.75% in England.  Mat Oakley, head of commercial research at Savills, comments: “While slowing capital growth in the commercial property market will ultimately lead to lower total returns, there are still plenty of opportunities out there for investors willing to go higher up the risk curve.  Over the year ahead, there will be an increasing focus on areas where capital values have not corrected as well as asset management, development and rental growth opportunities.  Investors may also create portfolios of smaller assets to capitalise on the high yields available instead of targeting larger, single assets.” In terms of high street retail investment, Savills reports that the recovery is no longer confined to London and the South as investor confidence in the top regional cities continues to improve.  For example, a unit let to Lloyds Bank in Manchester city centre recently attracted strong interest from UK institutions and foreign buyers with the final sale price reflecting a net initial yield of 4.14%.  However, for now there remains an average yield spread of over 100 bps between prime retail assets in London and the South versus other regions. Finally, Savills highlights the investment prospects of urban industrial estates based on the continued growth of e-commerce or, alternatively, the high capital value which can be extracted by converting the land for residential use.  In London, the land value premium for residential over industrial currently ranges from 54% in the North West to 42% in the South West.  Across the capital, the supply of industrial land has fallen from 7.3 million sq ft in 2009 to 4.79 million sq ft in 2015.  James Gulliford, joint head of UK investment at Savills, adds: “The problem for a lot of value-add and opportunistic investors is that yield compression has largely disappeared and, looking ahead, there will be a rising dependence on income return.  For offices, Northshoring and core to fringe migration in London and other big cities will help to deliver this.  For retail, rental growth will be sporadic but is most likely to be seen in the experience-led malls, sensibly rented bulky goods schemes and convenience high street markets.” Source link

A new community energy initiative focused on farm-scale wind turbines has been launched by Sharenergy and will combine projects in Scotland and Wales. Small Wind Cooperative is first to combine projects in different countries within the UK and will allow members to use the energy generated in their homes and businesses as part of a deal with energy supplier Co-operative Energy. The project offers people the chance to support three community turbines, one in Wales and two in Scotland, with bonds or shares and a minimum of £100. The bonds offer a return of 4.5 per cent and will be repaid after 6 years and the shares a projected annual average return of 6.5 per cent over 20 years. Small Wind Coop director Jon Halle said: ““We know that people don’t trust the big energy companies, which is why we are a small co-operative, which is completely owned and run by our members – no ‘fat cats’ here. “And we know that people want to support renewable energy in the UK directly – so we set up the Small Wind Coop to make that possible.” Sharenergy community renewables adviser Leila Sharland said: “This could be one of the last chances to join a community wind cooperative following recent changes in government support. “And as well as supporting ordinary UK farmers in Wales and Scotland, we’re offering our members a new way to connect the energy they are helping to generate with the energy they use at home or work. It’s a really exciting opportunity to be part of a new UK energy democracy.” The project will generate a community fund of £3,000 per year for 20 years at each location, to support local projects bringing social, economic and environmental benefits to the area. Source link

Hanergy has warned bondholders that it will miss payment on a bond issued by its hydropower subsidiary, a first indicator of pain for mainland lenders after its Hong Kong stock was suspended 10 months ago. The rise and abrupt fall of Hanergy’s stock has become a symbol for the excess in China’s stock market, which began its slide shortly after. The slide has exposed corporations and executives who borrowed against rising shares. Hanergy, which manufactures thin solar film, used its rising stock as well as its physical assets as collateral for heavy borrowing. Public documents show that the company borrowed against shares in its Jinanqiao dam in Yunnan Province — China’s largest privately owned dam — as well as against the rights to revenues from those shares. Hanergy issued the Rmb1bn PPN001 instrument in 2014 at interest rates of 7.8 per cent through the Pudong Development Bank, one of China’s midsized lenders. Caijing magazine on Friday reported that holders of the instrument had received a notice saying that payment would not be made on time. Two other notes totalling Rmb1.4bn are due next year. Hanergy founder Li Hejun often referred to Jinanqiao as his cash cow that allowed the company to take a bet on thin film solar power. The company confirmed the report, but said it would issue a clarification later. Meanwhile, trading in shares of China Yurun Food Group, a sausage maker, was suspended on Friday pending a statement on the potential impact from the default on domestic short-term financing notes issued by its subsidiary Nanjing Yurun Food. FT investigation How an obscure toy maker was transformed into Hanergy Thin Film, a solar group whose value touched $40bn before a dramatic fall back to earth The Hong Kong-listed company gave no further details in a filing to the Hong Kong bourse announcing the suspension. Nanjing Yurun on Thursday defaulted on a Rmb500m short-term financing note repayment, the company said. Additional reporting by Ma Nan and Reuters Copyright The Financial Times Limited 2016. All rights reserved. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web. Source link

Leading aluminium systems manufacturer continues to strengthen its sales and marketing team. Leading architectural aluminium systems manufacturer Kawneer UK has announced the appointment of Mark Hanson as marketing manager with additional responsibility for the development of products and services for the low-rise residential sector. Mark Hanson comes with a wealth of experience within the industry, having spent more than 20 years at Ultraframe where he was instrumental in growing, developing and promoting a range of aluminium-based conservatory and roof glazing products in the residential sector. Mark commented: “I am excited to start a new challenge within Kawneer and look forward to working with the team to further develop their already extensive product and service suite. I am fortunate to be joining such a respected and forward-thinking company.” Mark Clemson, Kawneer’s sales and marketing director added: “Mark’s wealth of experience and industry knowledge will make him a key addition to the team at Kawneer. His appointment is a sign of our drive for continued growth and commitment to being the leading company in our industry. “Our new products, combined with the growth in the use of aluminium-based glazing systems in the residential sector has led us to look for an addition to our team who will fit in with our ethos of innovation and service excellence. “We are very fortunate that we were able to find someone of Mark’s calibre to fulfil this role. I’m confident that Mark will play a key role in helping us deliver growth in this important sector.” ENDS About Kawneer: Kawneer offers a comprehensive range of architectural aluminium building products and systems which include curtain wall, windows, commercial entrance doors and framing systems. Since its beginnings over a century ago, Kawneer has been recognised as an innovator. Through the years, the company has balanced experience with innovation. It has listened to its customers and is dedicated to providing the tools its customers need to succeed. Kawneer’s global design expertise, combined with aluminium’s flexibility and recyclability, makes the company’s our building systems and products the right solutions for today and tomorrow. Kawneer products are made from materials of the highest quality and designed with the benefit of many years of construction experience. As the company controls every stage of the process, from mining the bauxite ore through to designing individual systems, it offers a unique resource to architects and contractors.   Source link