EPCs – Re-run of HIPs
A South West building expert has warned that the introduction of Energy Performance Certificates (EPCs) could be dogged by the same “confusion and logjam” that accompanied the introduction of Home Information Packs (HIPs).
Steve Puddicombe, partner in the building consultancy team at King Sturge in Bristol, told the firm’s annual media briefing that there is a major shortfall in the number of assessors required to help launch EPCs across the country.
He said there was a risk of a repeat of what happened with HIPs, the introduction of which was hampered by a lack of qualified home inspectors.
Since the beginning of April it has been a legal requirement that any large commercial building being bought, sold, or let has to have an EPC. The new law will be extended to medium sized buildings, or more than 2,500 sq m, on 1 July, and then to all remaining commercial buildings from 1 October.
From that date Government and public buildings will also need a Display Energy Certificate.
For most buildings, the EPC will be generated by a computerised “Simplified Building Energy Model” (SBEM), which an assessor will use to give a building an A-G energy efficiency rating.
“There is a clear parallel between what we are seeing with EPCs and the confusion and logjam which surrounded the introduction of HIPs for residential properties.” Said Steve.
“The SBEM software to prepare EPCs was only released last month, and as all assessors must be certified to use a specific SBEM sortware package, there are presently very few trained assessors ready to produce the EPCs.
For the moment, only buildings larger than 10,000 sq m need an EPC, so the size and complexity of some of those buildings could not be handled by SBEM. But when the law extends to smaller buildings this summer, there could be real problems.”
Mr Puddicombe said there will be fines of up to £5,000 for not having an EPC in time, while newly completed buildings without an EPC will not be able to obtain a Building Regulations Certificate.
“We can only hope that the SBEM software and sufficient assessors are in place to cope when demand for EPCs across the region begins to mushroom,” he added.
“As one of the founder members of the UK Green Building Council, King Sturge has already put in place resources to assist landlords, developers and occupiers to advise and manage the preparations of EPCs.”

Demand still strong for South West business parks
GVA Grimley’s bi-annual Business Parks Review: Spring 2008, suggests that in spite of economic uncertainties, the sub market sector of business parks is in good shape. The report details healthy levels of occupational demand across the UK which has contributed to a record year for take-up in 2007 with take-up totalling 546,000 sq m across the UK.
However, take-up in the south west region in the six months to December 2007 was 22,900 sq m, 11% down on the previous six months. Yet it was still above the five year, six-monthly average of 19,000 sq m. The majority of space was let at Gloucester Business Park and Kembrey Park in Swindon.
Demand has remained strong in key locations across the region, such as Windmill Hill in Swindon, Gloucester Business Park and Aztec West in Bristol. The majority of requirements continue to be from financial services, Government headquarter relocations and defence. There’s also continued interest in small unit schemes, whereas secondary stock is more difficult to let.
In the second six months of 2007, the amount of space under construction in the south west fell from 34,500 sq m to 14,100 sq m. 79% of the space under construction was speculative, with the largest amount of building activity at Gloucester Business Park and Emerson’s Green. This reflects the national trend, which as highlighted in the Report, sees a reduction in the proportion of space being built speculatively, down from 72% at the end of 2006, to 62% at the end of 2007.
The second half of 2007 also recorded the lowest level of availability in the south west for five years at 20,200 sq m. Similarly there has been a steep drop in the vacancy rate to 3.6%, the lowest rate of all the regions and compares to 11.2% three years ago. By floor space, the greatest amount of availability was at Waterwells Business Park in Gloucester (5,600 sq m) and Gloucester Business Park and Olympus Business park (2,800 sq m each.
Prime out of town rents in the south west have risen marginally by 0.3% over the past six months, but by 4.9% during 2007. Out of town prime rents ended 2007 at £253 psm (£23.50 psf) in Bristol, £199 psm (£18.50 psf) in Swindon, £183 psm (£17 psf) in Exeter, and £153 psm (£14.25 psf) in Plymouth.
Ben O’Connor, regional head of office agency at GVA Grimley incorporating Osmond Tricks in Bristol commented, “Given the current economic climate you would expect a sub sector market such as business parks to struggle. However the outlook is positive with healthy levels of demand and robust rental growth. We are forecasting national rental growth of 2.9% in 2008 and averaging 2.5% pa over the next four years.”

South West hotels boom while pubs collapse
Major hotel chains are eager to provide thousands of extra hotel rooms in the south west to meet buoyant demand, but the region’s pubs and clubs are “in turmoil”.
Meanwhile, national restaurant brands plan further branch openings in the West, and new casinos are recording meteoric success.
These were among the key messages from the leisure industry specialist at King Sturge.
John Kinsey, the leisure sector partner at King Sturge, told the firm’s annual media briefing that the south west’s hotel market is performing strongly, despite economic slow-down.

Hotels
“Over the past year, new hotel developments and acquisitions in the south west have delivered hundreds of new rooms, with hundreds more are awaiting planning consents or to find suitable sites”, said Mr Kinsey.
“In Bristol, there is an identified need for about 800 extra hotel rooms, while the new Future Inn is under construction in the city and Whitbread has received consent for another new hotel.
In Exeter, 275 new hotel rooms are under construction or awaiting planning consent; but the market needs to find sites for another 725 rooms”, said Mr Kinsey.
Bath, however is a problem city.
“Every hotel operator would like to find a site in Bath, but those sites are as scarce as hens’ teeth”, he added.
Plymouth also has demand for up to 400 new hotel rooms, if sites can be identified. The city’s new Millbay regeneration should deliver space for half of the new rooms, according to John Kinsey.
But the region’s hotel boom is not limited to the major cities.
“We are working with big hotel groups that also want to find sites in market and seaside towns. Whitbread, for example, is now creating new Premier Inns in Weston-super-Mare, Torquay, and Newquay”, said Mr Kinsey.
“There is also keen demand for new hotel sites in the region’s smaller towns, like Wellington, Trowbridge, Okehampton, and Launceston”, he added.

Pubs
While national hotel brands are flourishing in the south west, four pubs are closing every day throughout the country.
According to King Sturge’s John Kinsey: “The new smoking ban, the ‘credit crunch’, and the recent Budget have combined to create a lethal cocktail for pubs.
Two years ago, 21% of adults were visiting a pub once a week: that figure has already dropped to 16%.
“I believe that many pubs could have survived the 10% decline in trade, resulting from last summer’s smoking ban, and the further 10% penalty from customers cutting back on spending in response to the ‘credit crunch’.
But the Chancellor’s latest Budget will prove to be a killer-blow for many pubs. The 4p rise in duty, paid by the brewers, will increase the price of a pint of beer by 12p by the time that beer reaches pubs”, said Mr Kinsey.
“Although some pubs in the south west are performing better than the national average, thanks to higher incomes in some parts of the region, the south west also has areas where incomes are among the lowest in Britain”, he added.

Restaurants
Big name national restaurant chains remain keen to open new branches in towns and cities throughout the south west, despite tightening household budgets and the big number of restaurant openings in recent years.
“At a time when household budgets are under review, there is a move from spending £20 on a weekly pub visit to spending £30 on a monthly visit to a restaurant”, said John Kinsey.
“This benefits the national restaurant chains, which deliver a consistent product, in terms of the menu, the service, and the dining experience.
Start-up private restaurants have always been among the highest risk new businesses for failure: those that provide a very good product will continue to thrive, while those that have been less than outstanding but benefited from a strong market will now have to up their game or face collapse”, Mr Kinsey warned.

Clubs
While modern large scale clubs are trading well, the region’s recent boom in night clubs may have gone into reverse for some clubs that have not invested in keeping up to date and refurbishment.
“The effect of the smoking ban and the new licensing laws has already seen two of the country’s biggest club operators go into liquidation. 24-hour licensing means that customers no longer need to go to nightclubs for ‘after-hours’ drinking”, said Mr Kinsey.

Casinos
Despite the Government’s u-turn on Manchester’s super-casino, the west’s newest casino is already a “phenomenal success”.
Within months of opening its doors, the new casino in Bristol’s Harbourside development has secured a membership of 60,000, with strong trading results.
“This would suggest that 10% of greater Bristol’s entire population has signed up for membership”, said King Sturge’s John Kinsey.
“Just like the growth we are seeing for the known product quality of national budget and moderate price hotel and restaurant brands, the West’s leisure-consumers are choosing to spend their under-pressure disposable income on best-value entertainment.
Even though the ‘credit crunch’ is delivering a down-turn in many sectors, south west consumers are still spending money on leisure – but they are becoming much more choosey”, Mr Kinsey added.

Business reacting “bullishly” to the credit crunch
Despite the pressures, financial businesses appear to be reacting bullishly to the credit crunch according to a new study released today. When asked if they had to start their business again in today’s economic climate, 60% of financial businesses would do it all again tomorrow.
The research by The Credit Show, shows that SMEs, including financial businesses, plan to expand sales in the UK on average 56% in the coming year.
The study is based on detailed online interviews with 117 small and medium sized businesses. The businesses were drawn from across the UK and from a mix of sectors.
In general, the study paints a picture of an SME community in bullish mood. Just under half plan to expand into a new area in the next 12 months and a further 37% will recruit new staff. Over one in three plan to launch a new product or service and only 1% plan to scale back their operations. Indeed when asked to state their future optimism, nearly three quarters (70%) of financial businesses said they were confident about the future of their business.
The survey highlights a real audience split with some SMEs noticing the effects of the credit crunch on their business and others seemingly untouched.
However, there is no doubt that some SMEs are feeling the pressure of the credit crunch. For instance when asked what changes their business had noticed in the last 12 months, the top response with 56% was that suppliers had increased their prices. With other half of suppliers increasing their prices this will have a huge impact on the supply chain, affecting further businesses throughout the UK.
Despite being under pressure from suppliers, many feel unable to increase prices with their own customers, especially as many are facing weakening demand. Only 18% say customers are buying more on credit, and over half of SMEs (55%) admit that their customers are more and more frequently looking for deals or asking for discounts.
Kamala Panday, Publisher of Credit Today, organisers of The Credit Show comments: “For some, the credit crunch is beginning to bite. However this survey shows that their hunt for growth has not been affected. Businesses are now playing a more strategic game, with over half admitting to chasing slower payers more vigorously.
What’s encouraging to see from our point of view is the increasing role that the credit control function is playing with the SME strategy.”
Indeed with over half of SMEs saying that the credit control function has become more important, and with 30% tightening their grip on their credit control function through introducing stricter credit terms, credit issues have never been as important as they are today with SMEs.

Advice for landowners to maximise potential
“If you are a landowner or farmer who is currently deciding on the best course of action to maximise the potential of your land, there has never been a greater need for advice and guidance from professional surveyors,” says Mark Chugg, surveyor at Savills, Exeter. With planning and property development becoming increasingly complicated, landowners not only have to make sense of the continual changes in planning policies on a national, regional and local level, but there are many other factors that need to be considered too, such as delays within the planning system in processing planning applications.
Savills’ cevelopment team in Exeter works with private landowners and farmers across the south west, advising on the potential of their properties; the affect of planning policies on the buildings; and the development opportunities of the land, such as housing, employment or mixed use.
Mark Chugg continues, “If a landowner has a brown or green-field site that is within the development boundary of a city, town or village, it is likely they will be working closely with planning consultants, architects or urban designers on the potential uses for the site. However, it is also important to take advice at an early stage from a Development Surveyor, rather than leaving it until planning permission has been refused or granted for an inappropriate scheme. A surveyor will be able to assess the viability of a proposed scheme, provide consultancy advice on the best use of the site, highlight any planning or property issues and ensure that the scheme fits within its locality and fulfils the needs of the market place. If it does not, the proposed scheme could be too costly to build or will not achieve the land value it should.
It is also worth noting that the planning system is also in a state of transition between the old Local Plans and the new Local Development Frameworks (LDFs), which also offers opportunities for landowners. Whilst aim was to simplify the existing planning system, Local Planning Authorities are now having to review their planning policies under their Local Plans and replace these with new emerging policies in the LDFs for the development of land for housing and employment up to 2026. This transition is causing problems across the South West. Not only does it mean having to come to terms with a portfolio of planning documents which include statement of Community Involvement, Core Strategy, Issues & Options etc, but the transition in Cornwall is being hampered due to the Local Authorities being merged with the County Council to form a unitary authority, therefore there is a vacuum in forward planning policy.’
The transition is however providing opportunities for landowners and a development surveyor will be able to assist landowners to take advantage of these opportunities, through advising them on the promotion of their land through the various stages of the LDFs.”
Mark Chugg concludes, “Our main aim is to provide landowners with the right advice for their particular circumstances, achieve allocation of landowners’ land for housing or employment use, gain planning permission and ultimately to sell the land either to a developer or on the open market.”

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