Date: Thu 17th June, 2010
Venue: Bridgewater Hall, Lower Mosley Street, M2 3WS
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Conference call
Over 130 people from the North West’s property community were at the Bridgewater Hall for Insider’s first Business of Property conference. Neil Tague reports.
Neville Richardson, chief executive of Co-operative Financial Services, got events moving with a presentation on the story behind the Co-operative and Britannia merger, how the breadth of the Co-operative and the scale of the Britannia were being brought together to create “a new force in financial services”.
To hear Richardson speak of the vision for the group was a telling reminder that here in the North West we have a business, encompassing retail, travel, health, farming, car sales, funeral care and more, that is possibly more relevant today than ever before. Richardson said: “We will see the financial services arm work more closely with the group.”
He added that relationship banking is, for the Co-op, is not a marketing exercise, but something at the core of its banking philosophy. The number of corporate banking centres has doubled over the last four years and plans are afoot to grow the online corporate banking offer.
Second up was a panel session, featuring Drivers Jonas Deloitte national investment partner John Rodgers, Stobart deputy chief executive Richard Butcher; and two bankers in the Co-operatives Phil Basten and Deutsche Postbank’s Gareth Jones.
Are things on the up? Maybe not. Jones said: “Sadly we’re going to see bank funding become harder not easier to access in the next 18 months. Funders are becoming increasingly picky and rental growth is stunted.” Rodgers said that following a spike in investment market activity, there is a disconnect, with real rents falling and capital values going up.
But the prospects aren’t all bad. Rodgers said: “Manchester has a strong supply and demand dynamic and across the region there continue to be good deals available to opportunist businesses – we’ve seen some big industrial deals in the last year with the likes of Stobart, B&M Retail and Great Bear in Oldham.”
While most agreed Manchester looks as solid a bet as any UK location outside the South East, the prospects elsewhere aren’t so great. Rodgers said: “To some extent we’re becoming a two-city state with Manchester having consolidated as the capital of the north. But any stalling of public sector relocations would mean Liverpool and Leeds would not be so well placed.”
Basten however said long-term capital programmes were a cause of encouragement: “There are a number of projects across the region that will make the North West a powerful part of the UK’s recovery.”
After the presentation of some bespoke occupier research by the Murray Consultancy, it was onto the one-to-one session – “An Audience with Ian Coull”. The chief executive of industrial property powerhouse SEGRO was a garrulous speaker, offering some fascinating insights from the top of the industry.
Timing, he said, is everything: “We’ve not timed everything right, but our two biggest deals were both timed immaculately.”
The first was the takeover of stricken rival Brixton. As property values plummeted amid the banking crisis, SEGRO managed to raise equity through a rights issue – unlike Brixton, which it acquired in an opportunistic deal in August 2009. Deals at Brixton’s former holding in Trafford Park have almost trebled since the deal: “We’ve been more pragmatic with deals than Brixton,” Coull said.
Similarly, its deal to buy property assets from airport operator BAA was a “no-brainer”, Coull said. “BAA owned all the airside freight stock at Heathrow – we can now talk to logistics operators about what they want to see.”
