High demand from office occupiers has led to commercial values catching up with residential values in several areas of Bristol, according to new research from Savills. This is leading to some schemes in the city now being more profitable as office use rather than residential, despite increasing demand for housing. Following the economic downturn, Bristol’s economy has grown faster than any other city outside London, expanding 19.2% between 2009 and 2014, and is set for further growth. Bristol’s population is forecast to increase by 41,000 people (9.3%) by 2025 and an estimated 14,000 new office based jobs are due to be created in the city within a decade. Up to 1.4 million sq ft (130,000 sq m) of new office space is required to accommodate these workers, but at current take up rates there is only a year’s worth of Grade A office space in the city centre before demand begins to outstrip supply. In addition, the wider Bristol area requires a minimum of 85,000 new homes by 2036 to keep pace with demand. With an average of approximately 3,000 homes being delivered a year in the wider Bristol area this will lead to a shortfall of at least 1,234 homes every year if current building levels continue. “During 2015 we saw a large number of residential schemes launch”, says George Cardale, Head of Residential Development Sales. “Appetite continues to be very high; we have agreed more sales in the first quarter of 2016 than we did in the whole of 2012. With demand continuing unabated more new developments need to be rapidly brought forward to keep the supply/demand dynamic in balance.” Since the changes made to Permitted Development Rights in 2013, Bristol has seen the highest number of planning applications granted for office to residential conversations outside of London. 530 new homes were delivered by this route in the year to March 2015, accounting for around a third of the total number of new homes supplied in the city during this time. Developers on the hunt for higher returns had sought to convert redundant office space into more valuable homes, but with commercial capital values in Bristol now exceeding residential in several locations, in the face of ongoing demand from occupiers, this trend is now coming to an end, says Savills. With more space set to be retained as offices, this will further exacerbate the housing shortfall. Grade A office capital values in the City Centre have now reached £500 per sq ft when built – climbing 28% from circa £360 per sq ft in 2014 – compared to £425 per sq ft for residential space, as the area has become the location of choice for TMT start-ups and businesses. The current office space shortage is forecast to push rents to circa £30 per sq ft by the end of 2016, with Savills predicting a further rise to £35 per sq ft before the end of the decade. “Bristol is a great place to both live and work but it is at risk of becoming a victim of its own success, with prospective residents and businesses looking to locate elsewhere unless it rapidly develops more office space and homes to keep up with demand”, says Susan Emmett, Director, Savills Research. Chris Meredith, Director of Office Agency at Savills Bristol comments: “The strong demand for space, particularly from the TMT sector, has driven office rents for both new and refurbished space. Currently there’s only one year’s worth of Grade A supply in market and Bristol needs further development in order to continue to attract new major occupiers.” Download Savills Bristol Cross Sector report here Source link

Three of the UK’s distribution network operators have established data-sharing agreements with Ofgem E-serve to access records of distributed generation on their networks. The agreements, established via memorandums of understanding, have been made by UK Power Networks, SSE Power Distribution and Northern Powergrid. The DNOs will receive information about the location and capacity of renewable installations registered under the Feed in Tariff (FiT) scheme to help them balance supply and demand on their networks. This information will enable DNOs to meet their obligation to submit data to Ofgem as part of the price control more fully. Ofgem E-Serve is the administrator of the government’s FiT scheme which pays small-scale renewable generators to feed their excess electricity into the grid. It therefore keeps records of every installation accredited under the scheme. Ofgem E-Serve senior manager, FiT, Chris Wood said: “This data-sharing agreement is a great example of how the information we hold can be used to the benefit of consumers to ensure electricity supplies remain stable and reliable. “It will also help facilitate further development of embedded generation in the future.” Source link

The water sector has urged MPs to support a “vital” new clause added to the Housing and Planning Bill by the House of Lords, which would ensure flood prevention measures are put in place at new housing developments. Amendment 110 – which would remove the automatic right to connect surface water to the public sewer system – is due to be discussed in the House of Commons on Tuesday 3 May. Representative body Water UK said it will ensure that the use of sustainable drainage systems (SuDS) are considered in relation to all new developments regardless of scale, as developers would not have the “simple alternative” of disposing of surface water via the sewer system. Currently, developers are encouraged through the planning system to install SuDS on new developments. But they retain the legal power to demand a connection to the sewer system to handle water runoff from new homes. There is therefore no effective sanction where sustainable techniques are not implemented. The amendment was put forward by Baroness Parminter during report stage in the Lords earlier this week, with support from across the House, and was accepted by a large majority. Last winter thousands of people’s homes were ruined from floods, and there are more than five million homes at risk from flooding. SuDS are a range of schemes developers can put in place around new homes to better manage the water from heavy rainfall and prevent flooding. They also help prevent sewers from flooding people’s homes. Water UK said the new clause would ensure that practice in England is brought in line with current practice in the rest of the UK, which have more extensive SuDS standards or requirements. Source link

Boosted by a greater share of sales to first time buyers not seen in nearly four years, existing home sales in the United States maintained their upward trend in June and increased for the fourth month in a row. Only the Northeast of the nation saw a decline in sales in June and sales to investors fell to their lowest overall share since July 2009, according to the latest monthly index from the National Association of Realtors (NAR). Existing home sales were up 1.1% to a seasonally adjusted annual rate of 5.57 million in June from a downwardly revised 5.51 million in May. After last month’s gain, sales are now up 3% from June 2015 and remain at their highest annual pace since February 2007. According to Lawrence Yun, NAR chief economist, the four month streak of sales gains through June caps off a solid first half of 2016 for the housing market. ‘Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home despite many competitive areas with unrelenting supply and demand imbalances,’ he said. ‘Sustained job growth as well as this year’s descent in mortgage rates is undoubtedly driving the appetite for home purchases but looking ahead, it’s unclear if this current sales pace can further accelerate as record high stock prices, near record low mortgage rates and solid job gains face off against a dearth of homes available for sale and lofty home prices that keep advancing,’ he pointed out. The index data also shows that median existing home prices for all housing types in June was $247,700, up 4.8% year on year and it means that prices have now increased for 52 months in a row and surpass May’s peak median sales price of $238,900. Total housing inventory at the end of June dipped 0.9% to 2.12 million existing homes available for sale and is now 5.8% lower than a year ago while unsold inventory is at a 4.6 month supply at the current sales pace, which is down from 4.7 months in May. The share of first time buyers was 33% in June, up from 30% in May and a year ago and is the highest since July 2012 when it was 34%. Through the first six months of the year, first time buyers have represented an average of 31% of buyers compared to 30% in all of 2015. ‘The modest bump in June sales to first time buyers can be attributed to mortgage rates near all-time lows and perhaps a hopeful indication that more affordable, lower priced homes are beginning to make their way onto the market,’ said Yun. ‘The odds of closing on a home are definitely higher right now for first time buyers living in metro areas with tamer price growth and greater entry level supply, particularly areas in the Midwest and parts of the South,’ he added. The data also shows that all cash sales were 22% of transactions in June, unchanged from both May and a year ago. Individual investors, who account for many cash sales, purchased 11% of homes in June, the lowest since July 2009, down from 13% in May and 12% a year ago. Some 64% of investors paid cash in June. According to NAR president Tom Salomone, it is good news for estate agents that the US Senate voted last week to pass H.R. 3700, the Housing Opportunity Through Modernization Act. ‘At a time of historically low mortgage rates, this is a huge win for prospective first time and low to moderate income buyers interested in purchasing a condo. Eliminating overly burdensome restrictions on condos will help more of these prospective buyers access financing and take advantage of this affordable entry point into home ownership,’ he said. The NAR report shows that properties typically stayed on the market for 34 days in June, an increase from 32 days in May but unchanged from a year ago. Short sales were on the market the longest at a median of 156 days in June, while foreclosures sold in 49 days and non-distressed homes took 30 days. Some 48% of homes sold in June were on the market for less than a month. Distressed sales, that is foreclosures and short sales, amounted to 6% of sales in June, unchanged from May and down from 8% a year ago. Some 4% of June sales were foreclosures, the lowest since NAR began tracking in October 2008, and 2% were short sales. Foreclosures sold for an average discount of 11% below market value in June, down from 12% in May, while short sales were discounted 18%, up from 11% in May. A breakdown of the figures shows that single family home sales increased 0.8% to a seasonally adjusted annual rate of 4.92 million in June from 4.88 million in May, and are now 3.1% higher than the 4.77 million pace a year ago. The median existing single family home price was $249,800 in June, up 5% from June 2015. Existing condominium and co-op sales grew 3.2% to a seasonally adjusted annual rate of 650,000 units in June from 630,000 in May, and are now 1.6% above June 2015. The median existing condo price was $231,600 in June, some 3.2% above a year ago. On a regional basis June existing home sales in the Northeast were down by 1.3% to an annual rate of 760,000, but are still 5.6% above a year ago. The median price in the Northeast was $284,800, which is 1.4% above June 2015. In the Midwest, existing home sales were up 3.8% to an annual rate of 1.35 million in June, and are now 4.7% above June 2015. The median price in the Midwest was $199,900, up 5.7% from a year ago. Existing home sales in the South in June remained unchanged from May at an annual rate of 2.26 million, and are 3.2% above June 2015. The median price in the South was $217,400, up 5.5% from a

©AFP LafargeHolcim, the Franco-Swiss cement group created by a €41bn merger last year, is stepping up its post-deal disposal programme with planned asset sales in an another nine countries. Eric Olsen, chief executive, has been under pressure from some investors to boost the group’s performance, which has been hit by severe global pricing pressures and weak economic growth in key markets. More On this topic IN Construction Shareholders had been promised SFr3.5bn ($3.6bn) of disposals this year. But the company now says a portfolio review has identified a further nine countries “where we will seek opportunities to divest if we can achieve favourable valuations”. LafargeHolcim said it was confident of delivering this year’s target “and expects further divestments to crystallise beyond 2016.” Shareholder scepticism about the benefits of last year’s tie-up between France’s Lafarge and Switzerland’s Holcim — which succeed only after a series of internal power struggles — has weighed on the group’s shares, which are almost 40 per cent lower than a year ago. With a global capacity glut in the cement industry, Mr Olsen believes LafargeHolcim significantly over-invested in the past and is shifting the combined company’s business model towards lower capital spending and stronger cash flow generation. Asset sales will help LafargeHolcim reduce net debt but analysts have warned that a rush to push through disposals would lead to lower sale prices. “I don’t see how this process will create value — but that is the story of this merger so far,” said Phil Roseberg at Bernstein. “It is a very complex integration. You had two similar sized companies with two different cultures and now they want to create a third culture.” So far this year, the Zürich-headquartered company has already secured a third of its SFr3.5bn disposal target, through divestments in South Korea and Saudi Arabia and a merging of operations in Morocco. Competition authorities have required additional asset sales in India. LafargeHolcim, which operates in about 90 countries, has not set out where the next round of disposals will occur but it is expected to quit operations in most of the chosen locations completely. However, one country where LafargeHolcim is investing for longer-term growth is Brazil, despite the country’s economic downturn hitting its results in recent quarters. Last month, the group opened a SFr570m plant in Barroso, south-eastern Brazil, which has the capacity to produce 3.6m tonnes of cement per year. It first took the investment decision in 2011. Although it does not expect an early turnround in Brazil’s economic prospects, the company believes the new plant will cut production costs. It recently helped in the construction of the Olympic Village for this year’s Rio de Janeiro games. For the first quarter, LafargeHolcim reported a larger than expected 21.5 per cent annual fall in adjusted earnings before interest, tax, depreciation and amortisation, to SFr824m. But the group argued that the construction industry in North America and Europe was often hit by bad weather in the early months of the year, meaning the quarterly results were “not indicative” of expected full-year performance. Mr Olsen said then that he expected to see “momentum building through the year”. He has forecast “at least a high single-digit” like-for-like increase in adjusted operating ebitda in the group’s full-year results. Copyright The Financial Times Limited 2016. 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