Industrial – Shed demand in East Midlands is at 12-year high
2019 was the second consecutive year in which industrial take-up in the region was the highest ever recorded.
The 9.57m sq ft and 9.2m sq ft take-up for last year and 2018 respectively are the highest annual figures for any year since Savills started recording the data in 2007 and almost twice the 12-year average of 4.88m sq ft.
Banking – Metro Bank scales back
Following reported heavy losses last year of £130m, Metro Bank is planning to cut costs and halve the number of branch openings from 71 planned in the next three years to just 24.
Metro Bank’s new boss, Dan Frumkin, has described 2019 as a “challenging year”, which is somewhat of an understatement.
Retail – shopping centre leases and rents reduced
Hammerson and Intu, who own huge shopping centres, have had their rental income squeezed as shops try to share some of the pinch they are feeling. Some investors are fleeing and others are betting against them. Investors sell the stock of a company, wagering they can buy it back at a lower price and keep the difference.
For example, when Next reported its half-year results last July, it said some of its leases had come up for renewal. The High Street giant said it had managed to renegotiate 37 leases, with an average rent reduction of 28%.
In the past, he says, stores used to sign 10-year contracts, but recently these leases have tended to be five years in length. The danger for landlords is that, if they do not give in to the demands of retailers and keep their rents high, they will see their tenants go out of business, leaving vacant stores.
Leisure – Frankie & Benny’s owner speeds up closures
Restaurant Group who owns the chain said it would close up to 90 restaurants by the end of 2021. Initially it had planned to make the closures, which were first signalled last year over a six-year period.
However, on Wednesday, it said it would reduce the number of restaurants further to 260-275 by the end next year, down from 350 currently.
The group has seen sales fall at many outlets, despite stronger performances in its Wagamama and pubs units. The Restaurant Group shut 18 Frankie & Benny’s and Chiquito outlets last year, as a slowdown in consumer spending hit the UK’s casual dining sector.
Offices – Ted Baker to sell HQ
Ted Baker is close to striking a deal with the British Airway’s pension scheme to sell a large stake in the office, which is located in north London.
The sale is expected to raise millions of pounds, which has seen its share price crash after a string of profit warnings and a £58m inventory gap.
Financial – Chancellor under pressure to raise taxes
The new chancellor, Rishi Sunak is under pressure to increase spending on the NHS, social care and schools. He has also inherited a fiscal target from his predecessor Sajid Javid to bring spending in to balance by 2022.
However, the Institute for Fiscal Studies has suggested this will not be possible without increasing taxes. It said that loosening or abandoning the rules, set out in last year’s Conservative election manifesto, would undermine the credibility of any fiscal targets the government set.