Building contractor Pave Aways is opening a second office in Wales to support the growth of its work in Mid Wales. The firm is adding a new base in Newtown to its Welsh headquarters in Wrexham to underpin its increasing presence in the region. Its office at Ladywell House, which
Addington Capital, the investment and asset management company has sold The Quadrant, Abingdon Science Park to Kadans Science Partner, a science park, investor, developer and operator at a price of around £13 million. The scheme comprises four terraces of offices and laboratory buildings totalling 75,316 sq. ft. along with a
Kirklees’ Cabinet to consider £58M investment plan that could secure funding to support their Dewsbury Blueprint Ambitions. At their Cabinet meeting on the 19 January, councillors will consider a report on the proposed application for 25M funding from the Government’s Towns Deal Fund. The Dewsbury Town Board and Kirklees Council
Global building materials solutions supplier CEMEX has confirmed an investment of over £5 million into two new plastic packing lines for packed cement at its Rugby Cement Plant. This important development will significantly increase its capacity for producing packed cement and allow the business to provide long term surety of
Recent correspondence from British Steel has indicated increases in the cost of steel sections, the step increase in the cost of steel is very high considering the volatile market structural steelwork fabricators are working under. The problem here is that the market rate for structural sections has been for far
More encouraging volumes in the second half of the year signal a cautious return of confidence and investor appetite for 2021 Leading independent property advisory firm, Lismore Real Estate today released its comprehensive quarterly review of the Scottish investment market. In a year like no other, with challenges across the
A significant weight of capital will be chasing limited stock in 2021, according to new research from leading independent property advisory firm, Lismore Real Estate. Three quarters of investors surveyed by Lismore plan on being acquisitive during 2021, with the majority of those being funds and property companies. Stock is
Heat delivered by heat networks will require a ten-fold increase in volume if the sector is to fulfil its potential in contributing to the UK’s net zero commitment by 2050. Development of this scale cannot be afforded purely from public funding and up to £22bn of private capital will be
Aberdeen Standard Investments and development partner Graftongate are toasting the success of a multi-let urban logistics development in north London, where a new craft brewery is fully operational. Independent British brewer, Beavertown Brewery, has launched its state-of-the-art Beaverworld facility at Enfield Distribution Park (ENDP), having signed a 25-year lease on
IP Investment Management (“IPIM”), a Hong Kong-based boutique real estate investment manager and Maven Capital Partners (“Maven”), a leading UK property and private equity manager, have partnered to build Manchester’s first Hampton by Hilton hotel. The venture is Maven’s first hotel collaboration with IPIM, having already worked together on eight
Building contractor Pave Aways is opening a second office in Wales to support the growth of its work in Mid Wales. The firm is adding a new base in Newtown to its Welsh headquarters in Wrexham to underpin its increasing presence in the region. Its office at Ladywell House, which will open when the country’s latest lockdown ends, will be led by construction director Jamie Evans and used by its Mid Wales based team. Pave Aways completed the £2.1m conversion of the former office building into a hub for small business for the Heart of Wales Property Service last year. The firm is currently working on contracts valued at more than £26m with a third of that, including new homes for Powys County Council in Newtown and Sarn, taking place in Wales. Pave Aways, which has a Shropshire base near Oswestry, recently handed over the council’s first Passivhaus school in Welshpool in 2020 and has also been appointed to the Welsh Procurement Alliance’s Dynamic Purchasing System for Housing Construction. Managing Director Steven Owen said: “We already have a strong presence in Mid Wales and have worked on some key schemes in the region but this will allow us to provide a specific focus for our clients in the county. “We believe in having a positive impact on the area where we work and the addition of our new office will have a beneficial effect on the local economy. It will enable us to enhance the community support and education and training opportunities we can offer.” He added: “It’s a very exciting development for us and a great way to start 2021, especially after such a challenging year generally for construction. This is a positive step forward and signals our commitment to our clients in Mid Wales.”
Addington Capital, the investment and asset management company has sold The Quadrant, Abingdon Science Park to Kadans Science Partner, a science park, investor, developer and operator at a price of around £13 million. The scheme comprises four terraces of offices and laboratory buildings totalling 75,316 sq. ft. along with a 1.59-acre parcel of land, with planning consent for a further 20,000 sq. ft. of office and laboratory buildings. The Quadrant was acquired in January 2016 in a joint venture. Since then, Addington has successfully improved the occupancy from 30% to 85%, increased headline rents by 20% and secured planning permission on the development land. Existing tenants include PsiOxus Therapeutics, Tessella and Fishawack. Philip Symonds, partner at Addington Capital said, “By investing in the fabric of the highly adaptable buildings at the Quadrant, we were able to attract new tenants whilst meeting existing occupiers’ requirements. We were also able to design and secure consent for the next phase of development at the property. South Oxfordshire benefits from favourable occupational dynamics largely due to its burgeoning technology and life sciences sectors, which have proven resilient during the Covid-19 pandemic. We experienced this first hand in the number of new lettings, renewals and expansions completed at the property during the business plan. There continues to be strong demand for excellent quality, flexible accommodation in the region.” “I have no doubt the property under Kadans’ ownership, as well as the wider Abingdon Science Park, will continue to flourish in the coming years.” Doherty Baines acted for Addington Capital. Bidwells advised Kadans Science Partner.
Kirklees’ Cabinet to consider £58M investment plan that could secure funding to support their Dewsbury Blueprint Ambitions. At their Cabinet meeting on the 19 January, councillors will consider a report on the proposed application for 25M funding from the Government’s Towns Deal Fund. The Dewsbury Town Board and Kirklees Council have compiled a Town Investment Plan as part of their bid, following consultation with local people at end of 2020. The investment plan proposes nine projects that the board feels would best benefit from the funding and deliver on what is important to local people. Cllr Shabir Pandor, Leader of the Council and Interim Chair of Dewsbury Town Board said: “The council and the town board are working together to make our ambitions for Dewsbury come true. In February 2020 we set out a ten-year vision for the town, many of the schemes that the board has selected to support with this plan were included in that vision. With this funding from the government, and match funding from the council we could see many of our plans come to fruition and demonstrate that Dewsbury really is a town of distinction. With a new town centre park, the regeneration of the arcade and the market, and high quality residential accommodation attracting commuters from nearby cities, local people could see significant changes in the town over the coming years. Dewsbury is a proud town and it deserves to be brought back to life as a family friendly place to live, work, shop and play.” Should the bid be successful, in order to make sure they can successfully complete the projects, the council will also be looking to allocate £33.6M of match funding from a variety of sources including council capital, Arts Council grants, private sector contributions, and the Government’s Transforming Cities Fund and Getting Building Fund. If Cabinet approves the report, officers will finalise the Town Improvement Plan and submit it to the Ministry of Housing, Communities & Local Government by 29 January 2021. Once agreed Kirklees Council and the Town Board will enter into a Town Deal with government, before drawing up more detailed plans for the proposed schemes. The full list of projects included in the Town Improvement Plan are: £1.3M for the redevelopment of The Arcade as a multiuse space. £6.6M for an improved market offer in the town. £3.15M to build on the success of the Townscape Heritage Initiative with a new Building Revival Scheme. £250,000 investment in digital connectivity for town centre properties. 6.25M to create a town park and improve the public realm throughout the town. £1.5M investment in construction skills for local people. £2.195M investment in the Union Arts Centre as part of the town’s creative town ambitions. £3m to develop a living town at Daisy Hill in Dewsbury, and finally £2M to improve the roads and make it safer and easier to travel by bike or on foot. This latest funding opportunity will build on the council’s earlier investments of over £8M in the town, including the recent redevelopment of Pioneer House as the Pioneers Higher skills Centre, and the purchase of The Arcade.
Global building materials solutions supplier CEMEX has confirmed an investment of over £5 million into two new plastic packing lines for packed cement at its Rugby Cement Plant. This important development will significantly increase its capacity for producing packed cement and allow the business to provide long term surety of supply to its customers. Since CEMEX entered the plastic packed cement market in 2011, it has seen demand grow greatly year on year, and this investment will enable the company to meet existing and future customer requirements. Additionally, this investment will improve the design of the packed product so it can be better transported and stored. “We are very pleased to confirm plans to significantly enhance the plastic packing line at our Rugby Cement Plant. Packed cement is an important part of our UK business and this will greatly increase our capacity. This work will ensure we can continue to provide customers with the quality packed cement they need for their construction projects, while also offering further benefits during supply and storage of the product,” said Craig Williamson, Commercial Director of UK Cement for CEMEX. Work will begin at Rugby Cement Plant early 2021 and is expected to be completed by the start of the second half of the year. The development will run alongside the existing operation so there will be no disruption to production.
Recent correspondence from British Steel has indicated increases in the cost of steel sections, the step increase in the cost of steel is very high considering the volatile market structural steelwork fabricators are working under. The problem here is that the market rate for structural sections has been for far too long at a level that is unsustainable for steel mills to be viable. Equally, the market rate for fabricated structural steelwork is equally unsustainable in the long term when you consider part of the business is a bespoke design and detailing service, coupled with a semi-production type business, followed by unique sites requiring unique solutions. Recently, due to demand in other parts of the world, the cost of iron ore has almost doubled since March 2020 to a figure of $160 USD/dmt. Metallurgical Coke has also risen in the order of 45% during the same period. These two commodities being vastly important in determining the market rate of BOS produced steelwork. In a similar way, scrap has also recently increased in value by circa 70% from March 2020 to a price of $425 USD/t. With scrap being an important component of EAF produced steel, we would expect Arcelor to increase their prices in a similar way. It was explained to me over twenty years ago that any increase in the price of steel is headline news, whereas any increase in concrete just seems to go under the radar of the news outlets. Historically, an increase in the price of steel is swiftly followed by an increase in the price of concrete by a similar margin, I’m sure an economist would be using the term, “The Law of one Price” at this stage. I think we all know that the price of structural frames, irrespective of the material are set at a very low level due to the large capacity of the Tier 2 framing sub-contractors. These Tier 2 sub-contractors have for years being providing excellent frames at prices with wafer thin margins for decades. The resilience of Tier 2 sub-contract framing providers to events and changes beyond their control is nothing short of staggering. What is required is a very steady increase in the market rate of buildings such that all levels of the supply chain are making a reasonable margin for the risks they are taking in the construction industry, all the way from Tier 1 Principal Contractors, to Tier 2 sub-contractors and down the line to Tier 3 sub-contracts and suppliers. Historically, going back in the order of twenty years the steel mills used to try to maintain steady increases to their product by accepting the risk of buying iron-ore, coke, scrap and energy prices within their price structure. When demand for steelwork increased dramatically in China, circa 2004, the steel mills changed direction and decided their business model was not working and began pricing steel with rapid fluctuations in commodity items being passed down to their customers, namely Tier 2 sub-contractors. Perhaps, this was necessary to keep steel mills operational, as we all know the UK steel producer has been a serial loss maker for far too many years. The problem with this approach was now the fluctuation in the market rate of a commodity passed up the chain rapidly, which upsets the market rhythm by blowing budgets every time commodity prices increase, leading to further delays, further depressed prices as fabricators become nervous about not having enough work to meet contribution in their factories. So, it is not great when the commodity increases in price, but it must be great when the commodity reduces in price due to a lack of demand. Well the problem here is that there are simply too many steelwork contractors chasing too little structural steelwork, a hint of a dip in the price of steel is passed to the Tier 1 contractors probably at a faster pace than an increase as steelwork contractors push for an edge in an over saturated market. What is for certain when everybody in the construction industry has suffered the consequences of the uncertainties of BREXIT and the continued uncertainties of COVID, the last thing the industry wanted was what is seen by many has a large increase in the market rate of steel. Budgets for many future contracts will be based on artificially low framing prices and the result is going to be delays in contract awards, further value-engineering exercises and someone in the supply chain is going to ultimately “catch a cold”. Ideally this will be equally shared out throughout the supply chain from the clients right down to the suppliers, but I’m not confident that this will happen. I suspect there will be further delays to contracts commencing, which will make 2021 a much tougher year than already expected. What is for certain a “race to the bottom” in pricing will do nothing to maintain the quality of fabricated steelwork in the market.
More encouraging volumes in the second half of the year signal a cautious return of confidence and investor appetite for 2021 Leading independent property advisory firm, Lismore Real Estate today released its comprehensive quarterly review of the Scottish investment market. In a year like no other, with challenges across the entire property market and global economy, Lismore reflects on 2020 and looks forward to 2021. Transaction volumes for Q4 are anticipated to end at circa £420m, which is some 30% up on Q3 at £320m. Against the annual five-year average, this will be around 50% down, but in the face of such significant headwinds, it is not surprising and more positive than many were predicting earlier in the year. After a relatively subdued first half of the year, volumes in the second half of the year have been more encouraging, meaning that total volumes for 2020 will end up at close to £1bn. Against this backdrop and with the roll-out of a national Covid-19 vaccine programme, Lismore predicts a brighter year ahead, with investor appetite continuing across the hottest ‘in vogue’ sectors of the market, including distribution and multi-let industrial assets, along with food anchored and well-located retail warehouse parks. Recent deals including the £31m sale of Sainsbury’s regional distribution centre in East Kilbride clearly illustrate this trend. The residential market will remain resilient in 2021, particularly student accommodation, senior living, care homes and build-to-rent. Indeed the BTR sector will chalk up its most successful year on record, including the £81.5m sale of Candleriggs Square, Glasgow, a 346-unit scheme in September. The rapid emergence of life sciences as a stand-alone asset class will continue, with a significant weight of money starting to discover the sector and its burgeoning opportunities. The standout office deal of the quarter was the £45m sale of Quartermile 3 in Edinburgh by M&G to the German KanAm Grund Group. Colin Finlayson, Director at Lismore, said: “The outlook for 2021 is reliant on a successful vaccine roll-out to provide a much-needed literal and economic shot in the arm, along with the resultant lifting of Government lockdown restrictions. “If this happens we will see confidence returning and fear subsiding in the market, albeit Brexit will continues to loom in the background and cause uncertainty.” “Despite some concerns last quarter that the core plus sector was softening slightly, this has not (yet) happened and the continuing weight of capital circling this sector is helping to maintain pricing. “2021 is likely to see more opportunity for private equity. Patience remains a virtue and it makes sense for asset managers to add value where they can.” In terms of investor activity, some of the UK open ended funds have resumed trading and there has been orderly selling, with strong pricing being achieved for sales in the liquid sectors. Acquisition activity has been very focused on the safest sectors of distribution, industrial, long income and residential. Overseas investors remain prevalent and once current travel restrictions ease, we anticipate a strong comeback. The weight of global capital looking for a home has not diminished. Colin Finlayson concludes: “It is difficult to put into words the dramatic changes that the pandemic has caused to the economy and property market this year, but we are cautiously optimistic and look forward to increased activity and brighter times in 2021.” The Lismore Quarterly Review includes research on investor appetite and the evolution of real estate financing for 2021. In addition, it also features two in-depth interviews, one with a leading high street lender (RBS) and the other with Aberdeen Standard Investments. (Note from FR – may move this para into notes to editors) The full Lismore Quarterly can be seen here
A significant weight of capital will be chasing limited stock in 2021, according to new research from leading independent property advisory firm, Lismore Real Estate. Three quarters of investors surveyed by Lismore plan on being acquisitive during 2021, with the majority of those being funds and property companies. Stock is likely to be limited, as only 6% anticipate being net sellers and 20% remaining neutral. The research confirmed an appetite for more secure assets and, not surprisingly, the top three favoured sectors were distribution, followed by multi-let industrial, with food stores and residential in joint third place. More interesting is the tier below with both retail warehousing and offices receiving good interest. Private equity was the strongest supporter of retail warehousing. In the office sector, support came from private equity and investment managers. Funds surveyed do not view offices as a prime target next year. Hotels and high street retail, which have felt the full force of the pandemic downturn. were the two lowest ranked sectors. Opinion is split on bank appetite for lending to real estate in 2021, with funds and property companies being more bearish with 25% indicating a decrease against 15% indicating an increase. The overwhelming majority of private equity respondents were supportive of an increase. Lismore had a significant number of comments confirming that the increase in lending was from a fairly conservative base, and would be focused on the safer sectors of distribution, industrial, food stores and residential. Colin Finlayson, Director of Lismore, said: “Against the backdrop of the global pandemic, our research clearly illustrates that there still remains an appetite to invest in resilient sectors in 2021. The weight of capital towards real estate remains strong and much of it has been patient this year, waiting for some certainty to return. Outside of the most resilient sectors, transaction underwriting has been challenging this year which has curtailed activity. But with a successful vaccine roll-out, we expect more confidence and transparency in the market in 2020, leading to an increase in activity.” The research was undertaken by Lismore during November 2020, with more than 80 insightful and qualitative interviews with a wide range of investors, including funds, property companies, investment managers and overseas/private equity. It forms part of the Lismore Quarterly Review, which also features two in-depth interviews, one with a leading high street lender (RBS) and the other with Aberdeen Standard Investments. The full Lismore Quarterly Review is here
Heat delivered by heat networks will require a ten-fold increase in volume if the sector is to fulfil its potential in contributing to the UK’s net zero commitment by 2050. Development of this scale cannot be afforded purely from public funding and up to £22bn of private capital will be needed to if this target is to be achieved. The Department for Business, Energy and Industrial Strategy (BEIS) with Triple Point Heat Networks Investment Management – their delivery partner for the £320m Heat Network Investment Project (HNIP) – has announced a new Dynamic Purchasing System (DPS) for heat networks today. The BEIS Heat Investment Vehicle (BHIVE) will allow Public Bodies, including NHS Bodies and Local Authorities, to access funds and funding-related services for heat network projects from a portfolio of potential funders. BHIVE is open to all Public Bodies looking to finance a heat network including, financing the expansion of a new or existing network or facilitating the sale of part, or all, of an investment in a mature heat network. The role of private capital in unlocking the potential of heat networks To meet the UK’s legally binding commitment to net zero by 2050 in the most cost-effective manner, heat networks will need to provide 17-24% of the UK’s heat (currently just 2%)[1]. Achieving this objective requires the development of a self-sustaining market with a sufficient volume of strategic, low carbon heat networks which are economically attractive without direct Government subsidy. Development at this scale cannot be afforded by public funds alone. The Institute for Public Policy Research has estimated that up to £22 billion of private investment capital needs to be levered in if the sector is to fulfil its potential[2]. At the same time, institutional investors are seeking high class infrastructure assets with good quality counterparties and predictable long-term revenues underpinned by strong environmental, social and governance (ESG) principles. Prior to BHIVE’s launch, investors and investees had come together too infrequently and only on an ad-hoc basis. Funding Providers can apply to join BHIVE at any time by expressing their interest in funding heat networks; demonstrating their access to funds and their capability to deliver the associated services to execute funding. Finance options available will include equity finance and asset finance. HNIP was launched in 2019 to kick-start the market and has to date awarded £125 million to successful schemes across England and Wales. BHIVE will further support the work that has already been achieved by HNIP in ensuring a sustainable market which is not only economically attractive to investors but supports job creation and environmental benefits. Richard Turner, Amberside Advisors, part of Triple Point Heat Networks Investment Management said: “BHIVE has the potential to deliver significant benefits to the heat networks market, which is essential to meeting the net zero emissions target while sustaining green jobs and delivering economic benefits. It will make for a more efficient and effective fundraising process from the perspective of Funding Providers looking for funding good quality opportunities in a high-growth sector, and Public Bodies looking for value for money.” https://www.gov.uk/government/publications/clean-growth-strategy https://www.ippr.org/files/publications/pdf/piping- hot_summary_Mar2017.pdf
Aberdeen Standard Investments and development partner Graftongate are toasting the success of a multi-let urban logistics development in north London, where a new craft brewery is fully operational. Independent British brewer, Beavertown Brewery, has launched its state-of-the-art Beaverworld facility at Enfield Distribution Park (ENDP), having signed a 25-year lease on a 126,595 sq ft warehouse/production unit last year. The brewery was delivered on a pre-let basis with a tight delivery programme enabling brewing to commence within 12 months of the start of construction. Now up and running, Beaverworld comprises a bespoke five vessel Krones Steinecker Brewhouse, packaging space, warehouse, logistics hub and offices. It is expected to produce 90 million pints of beer every year and will eventually incorporate a 20,000 sq ft visitor centre with bars, tours and a restaurant, creating up to 150 new jobs. The brewery, founded by Logan Plant, the son of Led Zeppelin frontman Robert Plant, has been funded using a £40 million minority investment in the business by Heineken in 2018. It is the latest success at ENDP for ASI and Graftongate, where five of the six new warehouse/production units are already occupied. The joint venture partners recently announced the letting of a speculative 85,000 sq ft building to two-person home delivery specialist, ArrowXL, who join a strong list of occupiers including Cook’s Delights, Farmdrop and DFS. A planning application has been submitted for the final remaining plot at ENDP on a 2.5-acre site fronting A1055 Mollison Avenue, that can accommodate a unit of up to 50,000 sq ft on a design and build basis. Colin Beasley, Director at Graftongate, said: “We’re thrilled that Beaverworld is now fully operational. It has been a real pleasure working with Logan and his team to develop this exceptional facility, which promises to deliver one of the world’s best brewery experiences just a short distance from north London. Beavertown’s arrival secures another excellent company to ENDP, where we have concluded over 375,000 sq ft of lettings in six units over the last few years. We are expecting strong demand for the final unit of 50,000 sq ft which we intend to start building once planning consent in received.’’
IP Investment Management (“IPIM”), a Hong Kong-based boutique real estate investment manager and Maven Capital Partners (“Maven”), a leading UK property and private equity manager, have partnered to build Manchester’s first Hampton by Hilton hotel. The venture is Maven’s first hotel collaboration with IPIM, having already worked together on eight purpose-built UK student accommodation (“PBSA”) developments. Hampton by Hilton, Manchester, is Maven’s eighth UK hotel development and expands a hotel portfolio which includes brands such as hotel Indigo, Ibis Styles and Travelodge. The £24.6 million newly built hotel was designed by Tim Groom Architects, with Create Construction as the main contractor, alongside its sister company Create Developments, both part of north-west development experts, Create Group. The 221-room, nine storey hotel is the latest to join Hampton by Hilton’s growing portfolio, which includes 31 existing properties in the UK. Hampton by Hilton is one of the fastest growing global hotel brands, offering a consistent hotel experience at a competitive price point to business and leisure travellers alike. There are over 2,500 Hampton by Hilton hotels in 29 countries worldwide. The hotel is operating under a Franchise Agreement with Hilton, one of the largest hotel companies in the world with nearly one million rooms in 6,300 hotels worldwide, and a Hotel Management Agreement with RBH, a leading independent hotel management and services company operating a diverse collection of branded and private label hotel properties across the UK. RBH currently manages more than 45 hotels across the UK, including three on behalf of Maven. Located at 41 Rochdale Road, the property is well-situated to serve business and leisure travellers staying in Manchester’s vibrant Northern Quarter, which features colourful street art, independent record shops and some of the city’s most iconic cultural venues. Manchester’s popular Arndale Shopping Centre is a seven-minute walk away. The AO Arena (formerly The Manchester Arena) is a 12-minute walk from the hotel, which has the highest seating capacity of any indoor venue in the UK. Furthermore, the National Football Museum is located nearby, the Etihad Stadium is located 1.5 miles to the east and Manchester United Football Club is located 3.5 miles to the southwest. The Printworks, which is home to restaurants, bars, nightclubs, a cinema and a gym, are located 0.5 miles to the south. Colin Anderson, Partner at Maven, said: “We are delighted to continue our partnership with IPIM and are thrilled to add Hilton to our brand stable for what is our first development in Manchester. The new Hampton by Hilton is situated in a superb location with a host of attractions close by, and it will cater for the rising number of visitors coming to the area for leisure and business, as well as assist with the further enhancement of the city’s vibrant Northern Quarter.” Selina Williams, Executive Director, IP Investment Management, added: “I am very pleased to be furthering our relationship with Maven by partnering with them on our first hotel development. Despite opening in the midst of what is one of the most challenging years on record for the hospitality sector, we are optimistic about the future. Manchester is undoubtedly the UK’s second city with a bright future as part of the UKs northern powerhouse.” Graham Dodd, Managing Director of UK and Ireland Development at Hilton said: “It is a pleasure to see Manchester’s first Hampton by Hilton property completed and one step closer to welcoming its first guests. The city’s Northern Quarter is thriving and the addition of this hotel will further boost the area’s growing economy. We’re confident the high-quality accommodation, value-added amenities and thoughtful service the Hampton brand is known for will prove popular with locals and visitors alike.” Adrian Tottey, Managing Director of Create Construction commented: “Congratulations to all involved for completing this outstanding hotel project. The Covid-19 pandemic created a challenging environment during the build and it is a credit to the professionalism and expertise of the team that the hotel has been finished to such a high standard.”