It's supposed to be the summer but the weather's been awful and so has the mood amongst most property investors (at least according to the results of Reita's latest industry expert survey).
The most positive advice I’ve been given in the last month was to ‘take the next year off’ which may be easy if you’re a fund manager with a few million in bonuses in the bank but as I’m not one of them you’ll just have to put up with a few more despatches from the front line.
So what do I see coming straight for me but the four horsemen of the Apocalypse, dressed in gory robes and gracing the cover of Brixton plc’s half year report? Thanks to Duncan Lamb, genuine PR guru, the property sections of the papers have been full of Brixton CEO Tim Wheeler’s devotion to Bob Dylan and more or less accurate quotes from the apocryphal ‘All along the watchtower’.
For those of you who were in sunnier climes and missed the story, Tim used the lyrics of the first verse to describe the current uncertain state of the property investment market.
To quote Mr Zimmerman:
There must be some way out of here
Said the joker to the thief
There’s too much confusion
I can’t get no relief
Businessmen they drink my wine
Ploughmen dig my earth
None of them along the line
Know what any of it is worth
Scurrilous rumours have suggested that Brixton might not have obtained permission to reproduce these lyrics so I’m expecting a knock on the door at any minute and a ragged voice asking for lots of money. Maybe I could ask for an autograph as I’m dragged off to court?
“When you talk about destruction, you can count me out (in)” as John Lennon once said, prophesying the other big property story this month, the impact of the removal of empty building rate relief. The more hysterical members of the press may have conjured up images of bomb-site Britain as hard pressed property owners tear down swathes of valuable buildings to counter the government’s latest tax on enterprise, but there is a genuinely important story here.
The government felt, maybe logically, that penalising owners of commercial properties for leaving buildings empty would encourage them to lower rents and thus bring the buildings back into active use. The problem is that in the middle of the worst downturn in the commercial property market for 20 (30, 40??) years, what has happened is that owners have calculated that in many cases it makes more financial sense to demolish a building with a short life than to keep it empty. The industry is already suffering enough deflationary pressures, encouraging rent reductions, without added further government encouragement.
Watch your local TV channel for your local MP picking up on a genuine issue that Alistair Darling could solve with a bit of leadership and examples of the handiwork of Fred Dibnah’s descendents. Speaking of icons of the 1980’s and the age of both your correspondent and most IFAs, I thought that I would finish with a small remembrance of the age of pink leggings and big hair. A slightly miffed email landed on my desk this week, asking why Reita had failed to list details of the UK’s newest REIT, Pineapple Corporation, on its website.
I know that lots of property companies have funny names but this seemed just a bit too fruity, so a bit of digging revealed that the company in question is not only listed on the Luxembourg bourse and a really interesting proposition but also that one of the directors is the partner of Debbie Moore, founder of Pineapple Dance Studio and presumably the source of the company’s name.
It all comes back to me now, a sunny evening at my business school, a lecture on entrepreneurship and a drink with a tall, gorgeous blond (and slightly scary) lady in the bar afterwards; just the thought I need to brighten up a wet bank holiday!
Dave Butler is head of external affairs at Reita.
The views expressed in this blog are those of the individual.IFAonline
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