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
National proptech firm, MakeUrMove, has secured a £1.3 million funding package from shareholders to achieve its ambitious growth targets. Since the launch of the UK’s first subscription service in 2019, MakeUrMove has transformed its innovative platform to focus on addressing landlord’s specific needs and putting them back in control of
Funds advised by Hilltop Credit Partners, a specialist funding partner for SME residential developers, have completed a £2 million loan to Pars Developments to fund a private residential development in the Wiltshire village of Latton. The development sits on the edge of a National Nature Reserve and is a short drive
Network Space Investments Limited has completed the off-market purchase of a modern single let industrial building on Hellaby Business Park, Rotherham, for £2.45million. The building, Unit 6, is situated in the heart of the Hellaby industrial estate, immediately adjacent to J1 of the M18 and within easy access of the
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.”
National proptech firm, MakeUrMove, has secured a £1.3 million funding package from shareholders to achieve its ambitious growth targets. Since the launch of the UK’s first subscription service in 2019, MakeUrMove has transformed its innovative platform to focus on addressing landlord’s specific needs and putting them back in control of their rental properties. The success and uptake of the subscription service, called ‘The Good Landlord’, resulted in additional funding from existing shareholders, PP Asset Management, with the aim of MakeUrMove doubling the number of landlord subscribers in the next six months. Phil Pels, Owner at PP Asset Management said: “We fully believe MakeUrMove’s vision of using people-focused technology to transform the proptech sector for the better, addresses a vital gap in the market. MakeUrMove has proven over the years that its business model is viable and we are delighted to place more support behind their innovative approach to the private rented sector.” MakeUrMove continues to lead the way in developing innovative solutions aimed at helping the private landlord, recently launching tenant pre check services, digital viewing tools, editable digital contracts and a fully compliant document sharing portal. The platform goes beyond advertising and tenant find and focuses on handling the administration and tenancy management once a tenancy begins – utility notifications, renewals, maintenance management, rent collection and safety reminders are just some of the things MakeUrMove automates for the landlord to allow them to stay in control. The £1.3m funding will enable MakeUrMove, who launched in 2008 as the UK’s first national online letting agency, to execute new ground-breaking features. Plans in the pipeline will focus on both landlord and tenant solutions as the company recognises the importance of strengthening these relationships and building tools to support all stakeholders. The market as a whole has been poisoned by too many divisive voices and is in desperate need of a coherent solution which does more than what is currently out there. Renting and letting should not be difficult but it should be fair for everyone involved, good tenants and landlords should be celebrated and supported and MakeUrMove is on a mission to do just that. Alexandra Morris, Managing Director of MakeUrMove, said: “This is a truly exciting time for the business, and this funding will enable us to focus on evolving our services so we can continue to support our landlords and tenants. We are dedicated to the creation of innovative solutions in the private rental sector with technology at its core and our new features in development are key for helping us to reach our ambitious growth targets. “While the coronavirus pandemic forced much of the housing industry to close earlier this year, thanks to our flexibility and cloud-based technology, we continue to adapt to ensure we can keep supporting our landlords and help them maintain relationships with their tenants.” MakeUrMove is a leading proptech company and the only platform of its kind aimed at landlords. It was recently recognised for its leading customer service, winning ‘Best Online Letting Agent’ at The ESTAS 2020 (The Estate Agent of the Year Awards), as well as being shortlisted in the upcoming UK Proptech Awards and UK Business Tech Awards.
Funds advised by Hilltop Credit Partners, a specialist funding partner for SME residential developers, have completed a £2 million loan to Pars Developments to fund a private residential development in the Wiltshire village of Latton. The development sits on the edge of a National Nature Reserve and is a short drive from both the Cotswolds and Swindon. The facility will be used to fund the site acquisition, development of four new detached houses, and refurbishment of an existing semi-detached house; the facility also includes a VAT bridge loan. The target audience for the development is families looking to upsize, including London-based buyers seeking more rural locations with work-from-home space, private gardens and access to countryside leisure activities. “We are excited to be partnering with Hilltop, who have worked hand-in-hand with us to get this project funded. We believe this niche development will be received well by the market, particularly given the trends that have emerged post-Covid,” said Sepehr Izadpanah of Pars Developments. Latest Rightmove data suggests that homes sales agreed nationally were up +70% y/y in September, reflecting a number of factors, including strong pent-up demand, the introduction of government stamp duty incentives, and emerging structural changes in the nation’s housing market. The regional house price statistics from Land Registry also show pricing for newbuild housing stock in Wiltshire +7.2% y/y. The project has been sponsored by Pars Developments, who have decades of experience delivering high-quality, affordable family housing in the local Swindon / Wiltshire market. “We are pleased to be working with Sep, Morri and their development team on this project. Pars has a long history of successfully developing affordably priced housing in their local market, and this development fits perfectly with the direction the post-Covid market is headed – an increased focus on indoor and outdoor space and an ability to work from home in a beautiful part of the country,” commented Paul Oberschneider, Founder and CEO of Hilltop Credit Partners.
Network Space Investments Limited has completed the off-market purchase of a modern single let industrial building on Hellaby Business Park, Rotherham, for £2.45million. The building, Unit 6, is situated in the heart of the Hellaby industrial estate, immediately adjacent to J1 of the M18 and within easy access of the M1, Doncaster and Sheffield. The building extends to approximately 40,000 sq. ft and is currently occupied by a FTSE 100 listed long-term tenant. Martin Mellor, Managing Director of Network Space Investments Limited commented: “We are delighted to have acquired this building to add to our growing investment portfolio. “The property is both well located within the South Yorkshire conurbation and has been excellently maintained by the current tenant who has been in situ for eight years. The acquisition precisely matches our investment criteria to acquire good quality modern buildings in urban areas where there is significant future value growth potential.” Network Space Investments has appointed Doncaster-based NSM property and asset management specialists to manage the property. Network Space Investments was represented by CPP.