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The Covid-19 pandemic is continuing to cause major disruption to the UK’s economy and businesses. Our aim during this time is to support our clients and contacts by sharing relevant updates, together with our insights into how the real estate industry will be impacted.
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Andrew Teacher and the Blackstock Consulting Team
DAILY BRIEFING, Friday 11th June 2021
Norwood’s Annual Property Event, 14 June 2021
Blackstock Consulting is proud to be sponsoring Norwood’s annual property event, taking place on 14 June at 7 pm UK time.
Chairman of YOO Capital, John Hitchcox, will be speaking to EG’s director of market development Damian Wild about his recent projects, including the £1.3 billion redevelopment of Olympia, as well as his broader professional experience as an international property entrepreneur. The event will feature exciting live entertainment from the award-winning magician Dynamo.
The event is free to attend, and you can register on the Norwood website.
Norwood is a leading charity that provides comprehensive and life-long support to thousands of people with learning disabilities and their families every year.
Blackstock Consulting BossCast podcast series
In the most recent episode of our BossCast series, Blackstock’s Andrew Teacher speaks to Sir Tim Smit, best known for creating the Eden Project and for his social activism, ahead of his keynote speech at ULI’s UK conference. Sir Tim blasts modern developments that cause ‘mass misery’ and says a radical shift in our collective moral compass could completely alter the way we think about business, sustainability, and the built environment.
The ULI UK conference takes place on the 10th of June. Register here.
UK Government Response
Health Secretary Matt Hancock has sought to justify the first national Covid lockdown timing after claims a delay cost thousands of lives, BBC News reports.
He told MPs locking down earlier than 23 March 2020 would have gone against the scientific advice at the time.
He insisted that ministers challenged the scientists, but overruling their advice would have been “much harder”.
He also said that the Delta variant first identified in India now comprises 91 percent of new coronavirus cases seen in the UK.
Boris Johnson has said it is clear Covid cases are rising and hospitalisations increasing in the UK.
More than 5 million people are now on waiting lists for hospital treatment, with some forced to wait more than two years, according to the Telegraph.
Surgeons said the health service had reached a “grim milestone” with too many people left in pain and misery for operations that could restore their quality of life.
The NHS figures show the number of people on the list in April this year was the highest since records began in 2007.
According to the latest figures, nearly 41 million have received the first dose of their Covid-19 vaccine, and almost 29 million are fully vaccinated.
As of 4 pm on Thursday, the government has reported 7,393 positive cases and seven further deaths.
According to figures published by the Organisation for Economic Co-operation and Development (OECD), the UK’s recovery from the economic effects of the Covid-19 pandemic was slower than other major economies.
The BBC reports that in Q1 of 2021, economic output was 8.7 percent below pre-pandemic levels at the end of 2019, the lowest of the G20 countries. Year-on-year figures show G20 countries as a whole grew by 3.4 percent in the first three months of this year.
Last month, the OECD predicted that the UK was likely to grow 7.2 percent in 2021, up from its March projection of 5.1 percent, making it the fastest among the large, rich countries.
London’s FTSE 100 was up 0.3 percent as a string of upbeat earnings – particularly in insurance and pharmaceutical stocks – gently nudged investors ahead of key US inflation data, according to City AM. However, the mid-cap FTSE 250 dipped by 0.4 percent after hovering near record highs earlier in the week.
Corporate tax experts have warned that Britain’s push for an exemption for financial services from the recently-agreed G7 tax plan will open the doors for more “special pleading” from other countries, reports the Financial Times.
Heather Self, the UK-based corporate tax partner at accountancy firm Blick Rothenberg, suggested the move risks derailing a final accord as technical talks intensify.
OECD officials have struck an optimistic tone, suggesting a wider deal will be agreed at the G20 meeting in Venice in July and their “inclusive framework” talks with over 130 countries later in the year. But, ultimately, it will come down to them to find a formula that makes the deal widely acceptable.
Researchers at University College London have found that 83 percent of councils in England currently have housing companies, according to Inside Housing, rising from 78 percent in 2019 and 58 percent in 2017.
The research also found that 72 percent of councils were involved in at least one joint venture in 2021, up from 57 percent in 2019.
The report stated the reason for the increase stems from “a wish to share the risk, inject more investment into a project or provide more experience than the council may have”.
The New Homes Quality Board (NHQB) has launched a consultation on a new code of practice for house builders, reports Inside Housing.
The board aims to address gaps in protections for buyers. It introduces additional requirements for builders, such as having an effective after-care service in place to deal with any issues.
Natalie Elphicke, Conservative MP and former chief executive of the Housing & Finance Institute, is the chair of the board.
Speaking on the NHQB’s launch, she said: “The launch of the consultation on the New Homes Quality Code is a major milestone in our work to introduce a new and comprehensive framework of protections for homebuyers.”
Retail, Leisure & Hospitality
Former staff at Brewdog have alleged a “culture of fear” at the beer firm with a “toxic attitude” to junior employees, BBC News reports.
In an open letter, signatories said a “significant number” of former staff had “suffered mental illness as a result of working at BrewDog”.
They claimed that the firm was built around a “cult of personality” of founders James Watt and Martin Dickie.
The number of empty stores on Oxford Street has risen by nearly a fifth since the start of 2021, as pandemic-led lockdowns took a toll on the high street.
Some 17 percent of stores on London’s most famous street have closed since January, according to research by Property Week.
Among the most famous and largest of the empty shops is Topshop’s flagship store that sat next to Oxford Circus tube station. Before the pandemic, the goliath shop spread across three floors and hosted thousands of products from both Topshop and concession brands.
Model railway maker Hornby has reported a big jump in annual sales after people rediscovered their love of hobbies during lockdown, according to BBC News.
The firm, which also sells Scalextric, had sales of £48.5 million for the year to 31 March 2021, up 28 percent on the year before.
It said children and adults alike had bought its toys in the pandemic as they sought “comfort” in stressful times.
More than two-thirds of Morrisons shareholders have voted against the supermarket’s plan to hand bosses bumper payouts after removing the £290 million cost of dealing with Covid-19 before calculating bonuses.
The Telegraph reports that 70.1 percent of shareholder votes were cast against its remuneration report at its annual meeting in Bradford on Thursday.
A European Union privacy regulator has proposed fining Amazon over $425 million (£300 million), as part of a process that could yield the biggest penalty yet under the bloc’s privacy law, according to City AM.
Luxembourg’s data-protection commission, the CNPD, has circulated a draft decision sanctioning Amazon’s privacy practices with the proposed fine has been distributed by the CNPD, Luxembourg’s data-protection commission.
The design and consultancy firm Arcadis has announced the opening of its new office in the City of London next week, according to City AM.
The company will work from 80 Fenchurch Street in the City of London, a building that boasts over 40,000 sq ft of new office space spread across two floors.
Arcadis hopes the new offices will become a blueprint for companies looking to adapt to recent trends in the world of work and that city-centre office locations are still viable.
Deputy chairman of the City of London Corporation, Oliver Sells, said: “Big business moves such as this show that the Square Mile continues to be an attractive location from which to trade.”
Facebook has said it is on track to reopen all of its offices by October this year, reports Reuters.
The tech giant has also made flexible working arrangements a permanent feature of their employee policy.
In a statement, the company said that guidance was to be in the office “at least half the time”.
Building reports an influential group of MPs has slammed the government’s proposed reforms of the planning system, calling on ministers to think again about the proposed new “zonal” approach and ensure the public has a right to influence all individual applications.
The Housing, Communities and Local Government Committee report also called on the government to allow councils to levy council tax on unbuilt developments – something ministers have already said they are considering.
Levitt Bernstein has won planning for 52 affordable homes on Powell and Moya’s Churchill Gardens Estate in Pimlico, according to Building Design.
The scheme, at the 30-acre riverside site facing Battersea Power Station, is for Westminster council.
The council said 34 supported housing units will be built in the middle of the grade II-listed post-war estate due to replace the 31 existing homes in the estate’s Darwin House, with a further 18 homes for intermediate rent also provided.
John McAslan & Partners has been awarded the prestigious job to transform Glasgow’s George Square, eight years after its appointment on the scheme was initially cancelled.
The practice has been re-commissioned by the city council to design a new vision for the historic square and around 2.5km of surrounding streets.
Construction of the scheme is expected to start in 2023, a decade after McAslan first triumphed in a £15 million contest to overhaul the square.
DSDHA has secured planning approval for an 11-storey development of 333 homes in the heart of London’s Belgravia district.
The so-called Cundy Street quarter plans, drawn up for developer Grosvenor, include 88 affordable homes, 170 later living homes, and 75 homes for open market sale.
The scheme has attracted controversy because it requires the demolition of the art-deco inspired Cundy Street flats, designed by TP Bennett, and the 1924 Walden House building.
The scheme secured resolution to grant consent by Westminster council’s planning committee last night after officers recommended it be given the green light, despite the opposition of the Belgravia Society, which had described it as “overdevelopment”.
Transport & Logistics
Transport operator Go-Ahead has said that commuting “will never be the same again” following the drop in commuters due to the Covid-19 pandemic.
The Financial Times reports that the company has been deliberating whether to cut services after seeing as a permanent shift in working patterns.
Chief executive David Brown said there would be “difficult decisions” ahead as the transport industry adapted to smaller numbers of people travelling into the capital daily.
“The issue is really the south-east,” said Brown. “It is all early morning journeys from the south-east into the centre of London, that is going to change, that is never going to be the same again.”
The BBC has interviewed people who took part in the public consultations for the East-West rail project, including one man who erected a tower to display his dissatisfaction with the £5 billion plans to link Oxford and Cambridge.
66-year-old Peter Wedd said of his construction: “I will do anything in my power to make people aware of what is going to happen because this is time-limited.”
Investors controlling £29 trillion in assets have called for governments worldwide to end support for fossil fuels and set targets for rapid reductions in carbon emissions, reports the Guardian.
The 457 investors include the largest British asset managers, such as Aviva, HSBC Asset Management, Legal and General Investment Management and M&G.
The group, who hold almost a third of the world’s assets under management, signed a joint letter timed ahead of the G7 talks in Cornwall this week and the COP26 summit in Glasgow later in the year.
The move was coordinated by the Institutional Investors Group on Climate Change, a European membership body.
Research published by the non-profit Science-Based Targets initiative has suggested all of the G7 countries’ leading stock indexes are aligned with climate projections that far exceed those in the Paris Agreement.
Business Green reports that four top indices – including the UK’s FTSE 100 and USA S&P 500 – are currently positioned for more than 3C of warming by the end of the century, ahead of the 1.5C agreed in Paris.
The man in charge of HS2 has said he is not worried about the materials shortages currently gripping other parts of the industry affecting progress on the £100 billion scheme, Building reports.
With Travis Perkins the latest to warn about the impact of supplies running out, HS2 minister Andrew Stephenson said the project was not suffering from the same issues as other schemes.
He told MPs: “Our latest assessments do not currently predict an impact on (HS2’s) cost and schedule ranges published (earlier this year).”
He added that other big clients such as Network Rail were not being hit either.
A Balfour Beatty/NG Bailey joint venture and client EDF have U-turned on a plan to use ‘deskilled’ workers for electrical jobs at Hinkley Point C (HPC), according to Construction News.
Electricians staged protests over plans by the JV to hire ‘engineering construction operatives’, who would carry out tasks such as containment. Unite the union said such activities were the “bread and butter” of electricians’ work.
The union, HPC and the JV entered into talks in March about the plan. This week, the JV announced that EDF had “withdrawn” plans to use the operatives.
The Royal Liverpool Hospital building programme is expected to cost £108 million in this financial year, it has emerged.
Board papers from the Liverpool University Hospitals NHS Foundation Trust show that the organisation expects to spend the cash this year. However, it has not yet been approved by central government.
Laing O’Rourke is the main contractor on the project, having replaced Carillion. The facility was originally set to open in 2017, but many defects were found on the nearly completed building after the original contractor went under in 2018.
Banks exposed to cryptocurrencies such as Bitcoin could be forced to put aside more cash to fully cover losses on the assets due to the higher risks involved, global bank regulators have said.
The Telegraph reports that The Basel Committee on Banking Supervision, made up of regulators from the world’s major financial centres, said the growth of cryptoassets “has the potential to raise financial stability concerns and increase risks faced by banks”.
In a report published on Thursday, the Switzerland-based committee outlined potential risks for banks exposed to the industry, including money laundering, terrorist financing, fraud and liquidity risk.
Laughing gas has been shown as potentially being able to treat severe forms of depression in clinical trials, according to The Times.
Patients whose depression had not been alleviated by other drugs reported improvements after monthly hour-long sessions spent inhaling nitrous oxide.
Symptoms improved significantly in 11 out of the 20 trial participants, and some felt dramatically better for weeks after a single session. Eight had a period of remission during the fortnight after they inhaled the gas, meaning that they were no longer classed as clinically depressed.
Life Sciences Innovation: Building the Fourth Industrial Revolution
Our new report Life Sciences Innovation: Building the Fourth Industrial Revolution, is the most comprehensive report ever produced on the life sciences sector. Produced in-house by Blackstock Consulting, and commissioned by Perkins&Will and Savills, the report brings together investors, academics and real estate industry professionals to investigate the trends shaping the life sciences.
If you’d like to organise a briefing, please email firstname.lastname@example.org.
Our property podcasts have been running for over three years, and our current BossCast series has been immensely popular. Get in touch if you’d like to suggest a guest.
Eastdil chairman Ian Marcus says the evolution away from long leases creates opportunities for investors. Listen here.
Shaftesbury’s CEO Brian Bickell urges landlords to take on more risk in the wake of Covid-19 to transform “homogenised” high streets. Listen here.
Landsec boss Mark Allan talks plainly about the future of retail, eco-friendly offices and how the landlord-tenant relationship can evolve post-Covid. Listen here.
Europe’s largest Proptech VC fund, with €250 million of evergreen capital, is A/O Proptech. Listen to its boss Greg Dewerpe outline how innovation will be the key that unlocks ESG for real estate. Listen here.