The health of most things is about expectations. Ever wondered why animals don't suffer from the constant stream of ailments that either we, or our pets do? They don't expect to get ill. Ergo they don't.
The economy chugs along in a similar vein. We are happy to spend if we think times are good and cut back if times are bad. My grandfather is an Austrian, and after the horrors of WWI and WWII, they took to sewing gold coins in their trousers just in case. We are not at that stage yet, but just where is the tipping point?
Commercial property really suffers from expectations. If things are going well, we invest in property and tenants come forward wanting to create wealth. When people expect more turgid news and depression, people cut back and don't bother. It can be a perpetual cycle, which is what has been facing the Japanese over the last fifteen years. It can be exacerbated by an ageing population, when the risk takers really increasingly can't be bothered.
What we need is a Valium for the economy and electric shock therapy for the population. IN other words, we need some leadership that is going to help our expectations. What we do not need is insincere politicians blaming each other, local governments blaming central government or vice versa. Where are the professional leaders that motivate and inspire us? Surely they are not all that old that they can't be bothered?
Perhaps the newspapers have too much influence and their constant ridicule is a barrier to the talented and what we are seeing is the old adage that shit floats.
Wednesday, May 9, 2012
Wednesday, January 11, 2012
Cash Flow
The very wording of cash flow does imply that it always comes in, only to flow out again. Sometimes it seems that the ebb is greater than the inflow.
Three years ago, commercial agents usually got paid on completion of either the sale or lease. Nowadays, banks have a claim on the whole sale proceeds and with leases, there are such large rent free periods that there are no funds to pay the poor agent.
Most of the services that we provide, such as Rating Appeals, Valuations or even Dilapidation work provide a steady income flow down the line for the client. However, there is little up front cash generated and so no funds to pay.
These adverse conditions are making it very hard and we, as property agents, seem to spend an increasing amount of time chasing and collecting money.
Now I accept we are not the most popular sector of the economy, but our input is crucial and I am looking forward to the economy picking up so we can concentrate more on generating fees than having to remind clients to pay them.
I think that there are definite signs of matters picking up. We are experiencing a busier January than we have in the last two years and there are signs that people are deciding to 'have a go'. If the rents are fair and the leases reflective of market conditions, we seem to be able to get the deals together.
Sales, on the other hand, are still dire. If you want to give it away, it will sell. Otherwise don't bother...
...unless, of course, you have something equally cheap to buy. Then you are no worse off.
Three years ago, commercial agents usually got paid on completion of either the sale or lease. Nowadays, banks have a claim on the whole sale proceeds and with leases, there are such large rent free periods that there are no funds to pay the poor agent.
Most of the services that we provide, such as Rating Appeals, Valuations or even Dilapidation work provide a steady income flow down the line for the client. However, there is little up front cash generated and so no funds to pay.
These adverse conditions are making it very hard and we, as property agents, seem to spend an increasing amount of time chasing and collecting money.
Now I accept we are not the most popular sector of the economy, but our input is crucial and I am looking forward to the economy picking up so we can concentrate more on generating fees than having to remind clients to pay them.
I think that there are definite signs of matters picking up. We are experiencing a busier January than we have in the last two years and there are signs that people are deciding to 'have a go'. If the rents are fair and the leases reflective of market conditions, we seem to be able to get the deals together.
Sales, on the other hand, are still dire. If you want to give it away, it will sell. Otherwise don't bother...
...unless, of course, you have something equally cheap to buy. Then you are no worse off.
Wednesday, January 4, 2012
Very Busy New Year: Follow the Rainbow
The year has started with all guns blazing, mostly to do with solicitors trying to earn some cash after three weeks off!
As agents, we are often to be found chasing up deals and providing information to the higher power that we have already let them have; we operate in that quasi world where we are often expected to work for free. In other words, our job is to find a tenant/ buyer. However we often are a port of call for epcs, various reports and other random information, such as plans and enquiries. None of this is chargeable but we do it because we want to get paid for finding the tenant/ buyer and it smoothes the process and thus speeds it up.
I cannot imagine solicitors not racking up their unit calculators for doing the same.
Whilst we are busy, it does seem to be of the holding hand variety and trying to get deals finalised and through legals. In essence we are chasing the pot of gold at the end of the rainbow, often very elusive.
As agents, we are often to be found chasing up deals and providing information to the higher power that we have already let them have; we operate in that quasi world where we are often expected to work for free. In other words, our job is to find a tenant/ buyer. However we often are a port of call for epcs, various reports and other random information, such as plans and enquiries. None of this is chargeable but we do it because we want to get paid for finding the tenant/ buyer and it smoothes the process and thus speeds it up.
I cannot imagine solicitors not racking up their unit calculators for doing the same.
Whilst we are busy, it does seem to be of the holding hand variety and trying to get deals finalised and through legals. In essence we are chasing the pot of gold at the end of the rainbow, often very elusive.
Sunday, January 1, 2012
Happy New Year
Following a relatively successful 2011, we are running low on properties to let. If want to find a tenant for your property, then let us know. We would love to help. Shops, offices, industrial units, lock ups or anything that can be rented, please see how we can help.
The average vacancy rates for shops that we were solely instructed on, for 2011, was less than three months.
We try and be proactive and do not spend fortunes on needless advertising.
hugh@chartex.co.uk
The average vacancy rates for shops that we were solely instructed on, for 2011, was less than three months.
We try and be proactive and do not spend fortunes on needless advertising.
hugh@chartex.co.uk
Friday, December 30, 2011
Banking again
A curious juxtaposition in the modern world of politics (although isn't every thing associated with politics a contradiction?) is that politicians urge bankers to lend more.
Banks will lend if they have security, the most common form of which is property. Even stocks and shares can ultimately be based on the value of property- see Sainsbury's as an example.
However, new guidelines mean that banks cannot lend heavily to property and most UK banks are trying to divest their property loan books to bring their ratios back into balance. So if a bank is heavily exposed to property and they are supposed to be reducing the risk associated with that, how on earth are they expected to lend more money which will contradict the edicts from the FSA/ BoE?
We need to realise that the country's economy is based on land and property and those of us whom earn a direct living from it are not pariahs. (The least popular members of society are sometimes viewed as estate agents, solicitors, bankers, developers and builders!!).
We do want banks to lend more, and make more normal profits. Let them do this and don't shackle them with knee-jerk targets. If they get it wrong, let them go bust as does any firm that gets it wrong.
Profit is the reward for risk. Interest rates for both savers and borrowers reflect this: There is no safe investment that pays a return.
Banks will lend if they have security, the most common form of which is property. Even stocks and shares can ultimately be based on the value of property- see Sainsbury's as an example.
However, new guidelines mean that banks cannot lend heavily to property and most UK banks are trying to divest their property loan books to bring their ratios back into balance. So if a bank is heavily exposed to property and they are supposed to be reducing the risk associated with that, how on earth are they expected to lend more money which will contradict the edicts from the FSA/ BoE?
We need to realise that the country's economy is based on land and property and those of us whom earn a direct living from it are not pariahs. (The least popular members of society are sometimes viewed as estate agents, solicitors, bankers, developers and builders!!).
We do want banks to lend more, and make more normal profits. Let them do this and don't shackle them with knee-jerk targets. If they get it wrong, let them go bust as does any firm that gets it wrong.
Profit is the reward for risk. Interest rates for both savers and borrowers reflect this: There is no safe investment that pays a return.
Commercial Property: Positive Outlook
Commercial Property: Positive Outlook: We decided to stay open between Christmas and the New Year and it was worth it. We have had a steady stream of enquiries and have let a shop...
Positive Outlook
We decided to stay open between Christmas and the New Year and it was worth it. We have had a steady stream of enquiries and have let a shop and some office space. As a result, there was no void for the landlord of the shop which will help his business model. Because we prepared some in house leases, the tenants have already moved in.
Now I accept that the commissions will not turn the commercial world on fire, but the process goes to show that if you want things to go well, and you put in the hard work, it may well happen.
This is going to be our theme for 2012; let's not wait for government to bail us out, because they won't (the general feeling is that they protect the status quo and want to protect various sectors deemed as crucial). We are going to be to proactive and try and help ourselves. Despite the recession, there is business out there -we just need to find it! For example, there are growth industries that want office space and retailers that are doing well. These companies will do even better with our competitively priced space.
2012 will be the year when we worked hard and moved on, rather than dwelling on the past.
Now I accept that the commissions will not turn the commercial world on fire, but the process goes to show that if you want things to go well, and you put in the hard work, it may well happen.
This is going to be our theme for 2012; let's not wait for government to bail us out, because they won't (the general feeling is that they protect the status quo and want to protect various sectors deemed as crucial). We are going to be to proactive and try and help ourselves. Despite the recession, there is business out there -we just need to find it! For example, there are growth industries that want office space and retailers that are doing well. These companies will do even better with our competitively priced space.
2012 will be the year when we worked hard and moved on, rather than dwelling on the past.
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