A flexible office service has been launched in the UK, enabling professionals to use fully serviced workspace on a pay-as-you-go basis.

Dayoffice Card, the brainchild of former Regus sales director Matthew Stubbs, enables start-ups, SMEs, sole-traders and companies with a mobile workforce to occupy office space at more than 150 business centres across the country on a pay-as-you-go basis – keeping overheads low and productivity high.

The business enables people to buy individual days as and when they’re required, or for customers to opt for a pre-paid membership plan for a fixed number of days per month, be it two or 22.

Stubbs, managing director of Dayoffice Card, said that the business had launched at an optimum time, as financial forecasters suggest that the economy is entering credit crunch for the second time in five years.

“The past five years has seen an enormous number of start-ups launch and businesses of all sizes are examining expenditure as they undertake cost-cutting measures in order to survive the next wave. Underutilised office space represents a gulf when it comes to wasted expenditure.

“The last economic crisis led to an increase in mobile and home-based workforces as spending-savvy companies became more dependent on smartphone technology and other mobile devices

“We recognised a niche in the marketplace and Dayoffice Card was established with the aim of connecting professionals who won’t or can’t justify a full time office. Dayoffice Card is very much a cost effective solution for start-ups and SMEs that are home-based or operate a mobile workforce.  It’s especially useful for those needing a more professional environment for client meetings or to complete a project free from distraction,” he said.

Dayoffice Card already operates in London and 100 other major cities and towns including Edinburgh, Birmingham, Manchester, Leeds, Cardiff, Liverpool and Sheffield, offering prestigious addresses in the heart of each city as well as office solutions in surrounding towns and business parks.

Debt held against UK commercial property fell again during the first half of 2011 as the property finance market continued to show resilience in the face of global economic turmoil and stagnant UK growth.

The influential UK Commercial Property Lending Market mid-year report by De Montfort University, published today, found that the value of outstanding, on-balance-sheet debt fell from £208.4 billion to £201.3 billion in the six months to June 2011, a reduction of 3.4 per cent.

However, it also delivered a stark warning of the scale of the challenge facing property lenders, revealing that around a half of this debt, in a range of £85 billion-£114 billion, could not be refinanced on current market terms and that one quarter was secured on a loan-to-value ratio of more than 100 per cent.

The study, the largest of its kind to look at UK commercial property debt, estimated total UK debt of between £280 billion and £292 billion at mid-year 2011 (down from £288 billion to £298 billion at the end of 2010) including £46bn outstanding in the CMBS market and an estimated £19.9bn held by NAMA – Ireland’s “bad bank”.

This continued the measured reduction in debt seen during 2010 that has so far avoided a fire sale of property assets and a collapse in capital values. Report joint author Bill Maxted said the “process of deleveraging continued at a modest pace during the first half of 2011″.

However, the report found that the uncertainty triggered by the deepening Eurozone crisis and the lack of growth in the UK economy had exacerbated the ongoing lack of liquidity and increasing costs of capital in the property lending market.

Investigating the loan-to-value ratios of lenders’ loan books for the first time, the report found that 41 per cent – 56 per cent, or £84 to £114 billion, of loans “may not be refinancable on lending terms available in the market at mid-year 2011″.

Falling investment values meant that one quarter of this debt (24 per cent) had a LTV ratio of above 100 per cent, while just one fifth (21 per cent) had an LTV ratio of less than 60 per cent.

Lenders have been willing to extend maturing debt on non-market terms, with £48.4 billion of these loan extensions recorded by the research since 2009.  Consistent with that, a recent FSA survey found around 33 per cent of commercial property loans, representing £66 billion, to be in some form of forbearance.

The lending market also continued to contract. Two-thirds of lenders (66 per cent) said commercial property was an asset class against which they were willing to lend, but the proportion intending to increase the size of their loan books fell from around half (46 per cent) to one third (35 per cent) at mid-year 2011.

Almost all of those willing to lend (64 per cent of respondents) would do so against a prime office property, compared with just 29 per cent for a loan secured by a secondary office.

And further regional disparities were also highlighted by respondents. London and the South East were seen as being in “recovery mode” while “recovery in the provincial markets could take six years or perhaps longer to achieve with much pain during this period” – a gap described as “enormous” and “unbelievable” by respondents.

Development finance remained challenging. Those willing to lend against a fully pre-let development fell from 52 per cent to 31 per cent, and those willing to lend against speculative development fell from 17 per cent to 15 per cent.

Bill Maxted said: “Lending organisations commented that the existing liquidity crisis had been made more acute by the problems of European sovereign debt and the unknown extent of contagion between banks.

“Respondents have suggested that only an increase in confidence in the UK economy, demonstrated by a number of quarters of sustained growth in UK GDP, would signal a recovery in the commercial property market in the UK.”

Liz Peace, chief executive of the British Property Federation, the leading body representing developers and investors, said: “These figures underline how critically important it is for government to use all of the tools at its disposal to help tackle this overhanging property debt.

“This means encouraging new debt buyers in to the market – something that we think reform of the real estate investment trust regime to allow the creation of mortgage reits would help to achieve.

“It also means finding ways to encourage new investment and spur economic growth. One easy way would be to stop charging full business rates on empty commercial properties, something that is a considerable disincentive for landlords who wish to invest in premises for small and medium firms.”

Firework retailers to pay close attention to safety precautions and legal requirements when storing explosives, warns More Th>n Business.

In recent years there have been a number of incidents in which the improper storage of fireworks has led to explosions, serious injuries and in some cases even fatalities. This has resulted in a tightening of the laws surrounding the correct storage of fireworks, including reworked guidelines by the Health & Safety Executive (HSE).

To help retailers stay within the law, and to ensure they stay covered should they need to make an insurance claim, More Th>n Business has compiled a list of top tips on the safe storage of fireworks:

1. Ensure that you do not exceed the maximum permitted volume of fireworks for your premises.

Up to 250kg may be stored in a locked metal container.

Any more (up to 1,000kg) must be stored in a separate spark-proof store building, detached from any dwelling and constructed of brick, stone, concrete or iron.

The volume of fireworks permitted on the shop floor is dependent on the size of the publicly accessible sales area. This ranges from 12.5kg in 20m2, to 75kg in a 500m sales area.

2. Where there are five or more employees, a full risk assessment must be carried out and documented.

3. Up to 12.5kg of fireworks may be kept in showcases, containers, cupboards or drawers, but these must remain locked shut to prevent unauthorised access. Electrical fittings in such cabinets should be disconnected.

4. Glass showcases must not be displayed in shop windows.

5. Sources of ignition and flammable materials should be kept at safe distance, this includes smoking.

6. All fireworks sold should comply with British Standards BS 7714: Part 2: 1988.

7. Matches are not fireworks and should not be stored with them.

8. Sparklers are fireworks and should be stored in the same way as other fireworks.

9. If more than 75kg of fireworks is being stored, a fire detection system should be fitted to protect anyone living in the vicinity. Access routes should also be provided that are separate from the store, and such a store should be closed off to prevent unauthorised access.

10. Most importantly, retailers must ensure they have obtained the correct licence from the local authority under the Firework Regulations 2004.

Mark Christer, managing director, More Th>n commented: “It is imperative that retailers of fireworks ensure that they are operating in accordance with all legal requirements and guidelines to make certain they stay covered by their insurance for any eventuality.”

“More Th>n Business recommends that retailers not only follow the guidelines offered here, but also familiarise themselves with the detailed guidance offered by the HSE, and the requirements of their individual insurance policies.”

The British Property Federation (BPF) has joined retailers in urging Government to change the method of calculating commercial property tax, as September’s 5.6 per cent RPI announced hits retailers with an April tax increase they can ill afford.

Under the current system, September’s RPI is used to calculate the annual increase in commercial property taxes introduced next April. Today’s RPI figure of 5.6 per cent, the highest monthly rate since 1991, means an additional £350 million siphoned from the high street into Government coffers, according to research published today by the British Retail Consortium.

In its response to Mary Portas’s Government commissioned review of the High Street the BPF pointed out the compounding effect of linking business rates to RPI meant they had doubled over the past two decades, and if government wanted to provide certainty for retailers a better system would be to have a fixed uplift, of say two per cent – the UK inflation target.

If that was too expensive in the current climate, the Government should at least be using the rate of 5.2 per cent, which was what it had budgeted its own sums on in the Budget.

Ian Fletcher, director of policy at the British Property Federation, said: “This is bad news for retailers, landlords and the economy and comes at a time when many High Streets are fighting for their survival. At the very least the Government should not be making a windfall from business rates. It budgeted its sums on the basis of 5.2 per cent this year and should be giving the difference back.

“When finances allow the Government should also be considering two further reforms. The first to reinstate empty property relief – empty rates are an unjust tax on people deriving no income and who will be paying even more out now as a result of today’s inflation figure. Secondly, linking business rates to RPI has meant they have doubled over the last 20 years and Government should provide greater certainty for businesses by fixing the business rate uplift each year, which we have suggested should be at the rate of the inflation target, currently 2 per cent.”

 

 

Improvements seen in the commercial property market in first half of the year faltered during Q3 2011 as occupier demand fell back for the first time in 12 months, says the latest RICS UK Commercial Market Survey.

After rising over the previous six months, overall tenant demand retreated in Q3, moving into negative territory for the first time in a year. In addition, demand in London’s commercial property market, which had looked much stronger, failed to increase. Surveyors attribute this to the uncertain outlook for the wider economy which is impacting negatively on demand.

As tenant demand fell back, available space continued to rise, with 15 per cent more surveyors reporting available space rose rather than fell over the last three months. Available space picked up fastest in the retail sector, with a net balance of 30 per cent. The retail sector also saw the largest drop in demand for space.

Inducements rose over the last three months, as landlords looked to entice tenants into deals. At a net balance of 20 per cent, inducements are now increasing at their fastest pace since Q2 2010 and surveyors note that some landlords are incorporating more flexibility into their leases.

Falling demand and rising availability impacted on rental expectations, which weakened over the quarter, moving deeper into negative territory (-15 per cent). Respondents were least optimistic for office rents, which fell at the fastest pace for two years (-23 per cent); previously, this sector had displayed a greater level of resilience. The one area which continues to show a positive trend for future rents, albeit a flatter one than earlier in the year, is the central London office market.

Meanwhile, demand from investors was weaker across all sectors and regions of the UK except for London, where the balance managed to remain in positive territory, with 27 per cent more surveyors reporting a rise rather than fall in investment demand. One factor continuing to underpin this level of interest in real estate in the capital is the appetite of foreign investors.

Commenting, Simon Rubinsohn, RICS chief economist said: “While the London commercial market is still holding up relatively well, some of the positive momentum appears to have faded in the capital over the last few months – reflecting the wave of negative news flow surrounding both the prospects for the UK economy and the sovereign debt crisis in Europe. Confidence is clearly critical for the whole of the real estate sector and in the near term there is little reason to believe that it is likely to improve. Against this background, any recovery in rents is likely to prove elusive and capital values away from London look set to remain under pressure.”