©Bloomberg Barclays is among the big companies to have cut their dividends Sterling’s fall against the dollar has sparked a nosedive in company dividends as the Brexit vote takes its toll on UK investment portfolios. UK dividends dropped 5 per cent year on year in the first quarter, to $16.4bn, largely because of the weakness of the pound, according to data compiled by Henderson Global Investors. More On this topic IN Banks The pound has declined against the dollar this year amid uncertainty over whether Britain will vote to leave the EU on June 23. Ben Lofthouse, a fund manager at Henderson, said: “The strength of the dollar is a problem for sterling income investors. Growth in dividends is going to be less than inflation.” Henderson expects UK dividends to fall this year, making it harder for UK income investors to compete with global fund managers that look overseas for dividend returns. The latest worry comes as a survey last week showed that fund allocations to UK equities have fallen to their lowest levels since November 2008 because of worries about the Brexit vote. Global asset managers decreased their exposure to the UK stock market by 16 percentage points in May compared with April, according to Bank of America Merrill Lynch. As well as uncertainty over Brexit, the UK is struggling because of its dependence on mining and financial groups, where there have been some of the biggest dividend cuts. Miners BHP Billiton, Rio Tinto, Anglo American and Glencore as well as financial services groups such as Barclays and Standard Chartered have all done so. Rio Tinto and BHP Billiton made particularly savage cuts. Rio jettisoned its longstanding pledge not to make reductions, while BHP slashed its payout by three-quarters, which was much deeper than the City expected. Other major groups to announce big cuts in the first quarter included industrial aerospace company Rolls-Royce, which reduced its dividend by 50 per cent. The gloomy outlook for UK dividends contrasts with a more upbeat global picture, where payouts are surging as companies generate cash against a backdrop of recovery in the US and stimulative monetary policies in Europe and Japan. Henderson said it expected global dividends of $1.18tn in 2016, up 3.9 per cent on a headline basis and up 3.3 per cent on an underlying basis, which excludes special dividends. Despite the sharp fall in headline dividends in the UK, underlying payouts grew 0.7 per cent in Q1. Henderson said this was a good result, given the number of resource and banking groups that are listed on the FTSE. Mr Lofthouse said: “It was to be expected that the UK would lag other regions because of its heavy weighting towards the commodity and banking sectors. These cuts will bite deeper later in the year.” On the positive side, Royal Dutch Shell, having absorbed BG Group, promptly paid a dividend 2.5 times larger than BG had done on the equivalent capital. This will offset some of the dividend cuts and cement Shell’s position as the largest payer of dividends in the world. This year, it is set to distribute $15bn, one-fifth more than the next largest payer, Exxon. 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

Legal & General is breaking into direct housebuilding with the aim of producing thousands of flat-pack units each year, in an unprecedented move for a big British insurer. Using methods that have been touted as a potential solution to the UK’s housing crisis, L&G will build the homes almost entirely off-site in a new factory in Yorkshire, which will be Europe’s largest. More On this topic IN Construction The venture would boost new home building rates in the UK, which faces a severe shortage of workers with traditional construction skills. Government ministers are keen to bring about a steep increase in construction. Housebuilders have been increasing their output, but experts including the House of Lords’ committee on the built environment have warned they lack the capacity to produce 200,000 homes a year in England — the government’s target. L&G already owns a 46.5 per cent stake in the upmarket housebuilder Cala Homes, but the new venture will be carried out by the wholly owned entity L&G Homes. Tom Ground, head of bulk annuities at L&G, is to head the new venture. L&G declined to comment. The move will be partly aimed at constructing homes for rent, after L&G announced it would launch a £600m “build-to-rent” fund to develop purpose-built tenanted blocks using cash from its own balance sheet, matched by the Dutch pension fund PGGM. L&G has signed a 10-year lease on a 555,000 square foot warehouse in Sherburn in Elmet, Yorkshire, as its initial factory and plans to invest up to £500m in replicating the model at other locations, according to people close to the situation. The company has invested billions in regeneration and infrastructure, both on behalf of its insurance clients and in joint projects with other institutional investors. Housebuilders including Persimmon use off-site construction for parts of some properties, but modular output — prefabricated houses that are partly built elsewhere and assembled on-site — has so far been limited in the UK compared with markets such as the US. “People have been looking at these methods of construction for a long time but the take-up has been relatively poor to date. You don’t have anyone delivering significant volume into that market,” said Lucian Cook, head of residential research at the estate agency Savills. “Traditional housebuilders are more comfortable with traditional housebuilding models. They haven’t necessarily had the levels of commitment and investment to achieve the economies of scale that this needs.” He said L&G’s venture could act as a “catalyst” for other companies taking off-site production methods more seriously. Build-cost inflation using traditional methods such as bricklaying has been running at more than 6 per cent a year over the past two years, largely because of a lack of skilled workers. Another company aiming to produce large numbers of modular homes is the architecture practice Rogers Stirk Harbour & Partners, which has developed its Y-Cube one-bed low-energy affordable housing units in tandem with YMCA London South West. It has worked on relatively small sites but has said it wants to increase output to 7,500 units a year. 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

Willmott Dixon has secured a £17.5m contract to build a speculative office development in Bristol. Willmott Dixon has been selected for the Aurora building, which is part of Bristol developer Cubex Land’s Finzels Reach scheme. Finzels Reach is a £250m mixed-use development close to Temple Meads railway station and Cabot Circus shopping centre. The Aurora development will provide 8,800 m2 (95,000 square feet) of office space on the Floating Harbour. It is set to be Bristol’s first commercial office space to be BREEAM Outstanding. Willmott Dixon is working with a Bristol design team, including architect The Bush Consultancy, Dickson Powell Partnership as quantity surveyor and project manager plus structural and building performance engineer Hydrock Consultants. The seven-storey Aurora building includes a glass atrium, basement car and and a link to the Grade II listed Generator Building next door. The building is scheduled to be completed to shell, core and CAT A stage by the end of 2017. Cubex director Gavin Bridge said: “I’m delighted that with our solid financial backing we are pressing ahead with this speculative development encouraged by the fact that Bristol has a shortage of Grade A office space which has already resulted in rental growth. Aurora will be the first new development to be completed in a number of years and will deliver the very best office space Bristol has to offer in a vibrant, mixed-used location.”     Further Images This article was published on 8 Jul 2016 (last updated on 8 Jul 2016). Source link

Moda Living and Apache Capita have got planning permission to build a 34-storey apartment block in Liverpool for the private residential sector. Above: The Lexington Liverpool The £80m tower block, called the Lexington Liverpool, will have 304 apartments of varying sizes. It will be the tallest residential development in Peel Group’s Liverpool Waters regeneration area. Moda Living and Apache Capital will retain ownership and operate it through their PRS joint venture. Lexington Liverpool is the third project to be brought forward by the joint venture. It has previously secured planning permission for the £128m, 466-apartment Angels Gardens development in Manchester and for a £145m, 37-storey block of flats on Birmingham’s Broad Street. Moda Living director Dan Brooks said: “Liverpool is an exciting place to be in right now, with lots of development activity and a real can-do attitude from the council. The Lexington at Princes Dock will help underpin the regeneration efforts there while also providing much needed quality homes for rent. This is the next important step in our ambitious plan to create the UK’s leading rental brand providing a new benchmark for city centre living.” Apache Capital managing director Richard Jackson added: “The Lexington will provide a fantastic legacy for Liverpool and its historic skyline and waterfront, creating from the outset a vibrant community that will be part of the local area.”         Further Images This article was published on 21 Sep 2016 (last updated on 21 Sep 2016). Source link