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Focus: Battersea v King's Cross — developers tussle to create London's next commercial hotspot

2018-12-13 03:23:32 admin

High up on one of the walls of the Battersea Power Station, beneath its towering white chimneys, you can still see a scribbling on the red brick of the iconic building which used to supply London with electricity. It reads: “Captain James T Walker of the Starship Battersea”. 

The faded landmark’s redevelopers are hoping the station’s swish new tenant, Apple, hangs on to the quirky graffiti when the rough-and-ready site is  transformed. 

The tech giant’s new London headquarters is at the heart of a revamp, due to complete in December 2020, which will see the building house a cinema, a food court and 100 shops across two distinct shopping centres. It is one of a string of huge central London projects vying for the capital’s wealthy shoppers and office tenants amid a squeeze on consumer spending and a Brexit-hit commercial property market.

Gazing round the industrious building site on a sunny afternoon, it’s easy to see the vision, despite the fact there’s no roof and burly builders are stomping through puddles. With its old marble tiles and existing large internal windows, which will soon be store fronts, a shopping centre appears a natural fit. The wider site is already host to hundreds of plain-looking flats and a riverbus service and will eventually boast 4000 new homes, of which a small percentage are “affordable”. There’ll be a glass elevator viewing platform for tourists and a new tube station.

The project, overseen by the Battersea Power Station Development Company, represents a promising next chapter for a site known around the world but a perennial headache for its succession of owners: plans for a theme park, eco-dome and rival housing and retail complex have been floated and ditched. It’s been empty for three decades and has changed hands several times until 2012 when the site landed its Malaysian owners, Sime Darby, SP Setia and the Employees’ Provident Fund. In January, Permodalan Nasional Berhad, a fund manager with £50 billion of assets under management, said it would buy a stake in the building from Sime Darby and SP Setia, which between them own 80% of the site. Almost twelve months later, the deal has yet to be finalised. 

The iPhone maker’s offices, which will see 1400 staff occupy six floors, will be one of its largest outside the US, a big coup for Battersea when it landed the gig in 2016 after a year of courting. 

A string of tech players have come knocking since, insiders claim, enquiring about the offices that will become available during the later stages of the £9 billion regeneration around the “Cathedral of Power”, which will also host No18, a Swedish members’ club, part of serviced offices provider IWG. 

But there have been some jitters of late. Apple is reportedly eyeing some temporary office space in case there are delays to the project’s completion, and several Malaysian entities have faced troubles at home with a string of deals in which Malaysian sovereign wealth and pension funds had invested being probed over money-laundering concerns. BPSDC said, however, that this isn’t something which Battersea’s owners have been or are currently subject to. In June, a senior Malaysian politician said the PNB deal should be investigated. 

During the visit, Simon Murphy, BPSDC’s chief executive, says the shareholders are committed to the project. 

THE former power station is not the only huge project reshaping London with the help of Silicon Valley. Over in King’s Cross, which has almost completed its £3 billion revamp, Google is building a £1 billion HQ and Samsung will open a giant showroom to rival Apple’s in Regent Street. In summer, Facebook said it will open a large new office there, turning the area into one of London’s leading tech clusters. Andrew Barnes from JLL, the property adviser, argues: “Battersea won’t have quite the same draw, nor the multitude of tenants. Battersea has one main tenant. It doesn’t have a critical mass.”

And while east London remains a key hub for tech firms bidding to become the next Facebook, larger developers are beginning to discern that workers are after Shoreditch-style eclecticism around more central locations. 

Adam Walford, a property lawyer at Howard Kennedy, says: “Apple, Google, they’re keen to be somewhere where their staff come to a really nice village within a town.”  

Moreover, the presence of blue-chip tech firms and the cash they pay in rent in these areas can often serve as an informal guarantee in conversations developers have with the banks. A long-term lease from a tech giant adds credibility to the project and an assurance of large chunks of rent. 

This tactic has allowed Battersea and King’s Cross’s backers to gamble on smaller, more trendy but less proven brands to make their project look different. 

As such, household names like Paul Smith or Cos are joined in King’s Cross’s Coal Drops Yard by a string of fledgling brands. The new shopping street boasts more than 50 stores including Bonds, a fledgling so-called lifestyle brand, where you can grab a coffee or make candles in store.

A property source, who has clients at Coal Drops Yard, says: “King’s Cross is taking a bit of a flyer with that. There are companies in there that have been around for a year and can’t demonstrate financial sustainability. The rationale is, we have the right environment to make it work.” He added that rents are still sky high even for the smaller brands. 

There’s a similar strategy at Battersea. Sam Cotton, head of retail leasing, says: “We’re avoiding the very old, formulaic way of setting out a retail destination.”

You won’t see the big beauty floor à la Selfridges or House of Fraser, where a clutch of cosmetics brands sit together. It will lease independent spaces that vary in size and rent for them. Nor will you be able to shop in the likes of Topshop or New Look. There will be a separate High Street outside for those. 

If both projects can thrive, there’s hope in the world of beleaguered shopping centres retail that a blueprint could be created. 

Let battle commence. 


Paddington to White City  

Known as the knowledge quarter, this area is attracting pharma firms keen to be closer to tech giants — Microsoft’s London HQ is in Paddington Basin. Swiss drugs giant Novartis said it will move its HQ to White City, joining fellow life sciences companies Autolus and Synthace.


Tech tycoon Teddy Sagi’s property investment firm Labtech will plough in millions of pounds to open a new development in Camden Town, with 150 stores and 60 restaurants, plus offices and flats. LabTech says: “It has the advantage of having excellent transport connections.”

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Supermarkets pin hopes on late Christmas rush

2018-12-13 03:23:25 admin

Tesco, Sainsbury’s and Morrisons on Tuesday pinned their hopes on last-minute Christmas shopping to boost their coffers as it emerged fewer shoppers had visited their stores in recent weeks. 

Three of the four biggest grocers lost market share to rivals as they entered the crucial trading period, according to Kantar Worldpanel’s latest industry figures. 

Tesco dipped to 27.6% in the 12 weeks to December 2 from 28.2% the year before. Sainsbury’s fell from 16.4% to 16%, while Morrisons edged down from 10.6% to 10.5%. Asda’s market share was flat. Tesco, Sainsbury’s and Waitrose saw sales drop 0.1%, 0.2% and 0.7% respectively.  

Co-op and German discounters Aldi and Lidl continued to grab market share. Giles Hurley, boss of Aldi UK, said: “We enter the Christmas trading period with great momentum as the UK’s fastest-growing supermarket.” 

Researchers at Nielsen on Tuesday added that although it has been a slow start to Christmas trading, there will be a bumper Christmas Eve. Shoppers are expected to spend £7 billion in the last two weeks of December. 

Kantar said it also expects festive spending “to break records” thanks to an extra day of having shops open as Christmas falls on a Tuesday. 

More than one in eight households have already brought a Christmas pudding, while Brussel sprout sales have already hit £18 million.

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Margareta Pagano: Bookshops are a bright spot in retail as publishing thrives

2018-12-13 03:23:12 admin

The country might be in turmoil because of Brexit but here’s a safe bet: you are going to buy, or receive from someone in your family either Michelle Obama’s autobiography Becoming, or The Ice Monster by David Walliams and illustrated by Tony Ross.

Right now, The Ice Monster has edged ahead of Obama to take the top slot in the Christmas best-seller charts. Even booksellers are astonished at the speed with which these two books are racing off the shelves and, with two weeks to go until Christmas, are hoping for a bumper year. Like in the jewellery business, December is the Holy Grail for the book trade with up to 40% of all fiction and non-fiction books sold during the Christmas month. 

To date, Obama’s Becoming is the fastest-selling hardback non-fiction title in the UK since Alex Ferguson’s My Autobiography published five years ago. Boosted by the publicity of her London visit last week, Obama’s autobiography is being gobbled up by women of all ages around the country to give to their female friends and relatives. 

They also reckon that with two million copies of Obama’s book having been sold worldwide more or less at the full price, Penguin Random House may be close to raking back much of the enormous $65 million (£50 million) advance paid to the Obama couple for their books — the former president, whose biography is out next year, has a job on his hands to beat his wife’s record.

If this rate of book sales continues through to Christmas, the industry is crossing its fingers for confirmation that books are back in fashion. It has already been a good year with a number of stellar “feel-good” books breaking records. By far the biggest UK seller of the year so far is Gail Honeyman’s Eleanor Oliphant is Completely Fine, selling a whopping  700,000 copies, and in second place is Adam Kay’s This is Going to Hurt, the hilarious secret diaries of a young NHS doctor. 

They have helped to buoy sales of the print-book market, making this the best year since 2011. The latest figures from Nielsen BookScan show that sales for the year to December 1 are 1.3% up on a year before at £1.3 billion, although volumes are down a smidgin.

This is still a long way off its pre-crash heyday, when sales between 2006 and 2007 hit a record £1.9 billion. But Tom Tivnan of The Bookseller says the industry is going through a renaissance and reckons sales this year could be as high as £1.6 billion after Christmas is taken into account.

What’s driving this revival? Fewer retailers are discounting prices, digital has opened up new markets and bookshops have woken up to the need to host live events with authors and other experiences to attract readers.

Growth is most marked in the children’s books market and in audiobooks. Audiobook sales are up by 20% year-on-year and have created a new market, notably among men aged between 25 and 45, a demographic that traditionally reads the least.

In an era when time is so short and the mood troubled, readers are also pouncing on “smart thinking” books and authors who stir debate. That’s quite a contrast to the Ladybird books and adult colouring books which did so well after the crash.

This year’s other big hits include those by agents provocateurs such as Jordan Peterson with his 12 Rules of Life or thinkers such as Yuval Noah Harari with Sapiens.

The appetite for self-help books such as Mark Manson’s The Subtle Art of Not Giving a F*ck, Professor Steve Peters’ life guide the Chimp Paradox and Matthew Syed’s You Are Awesome also remains undiminished.

But the best news of all is that people are buying books again in physical bookshops, rather than online with Amazon. It’s difficult to get accurate figures but there is a definite shift back to bricks and mortar: Waterstones, which bought Foyles earlier this year, is making excellent profits and opening up new stores again. And, for the first time in years, there were more net openings of bookshops this year than closures. The High Street is not dead yet, just changing again.

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Simon English: Insurers are next up as watchdog cracks down on drinking and thriving

2018-12-12 03:18:27 admin

Five years ago a ribald novel called Thursday Nights, Monday Mornings gave an inside view of life at Lloyd’s of London. Briefly: loads of drinking and shagging. Loads of other risk-taking from folk (mostly men) who can’t tell the difference between the day job — placing bets on the likelihood of disasters — and the rest of their life.

A character called Ton Up Tony was the most eye-catching. The Ton stood for the number of women, at Lloyd’s alone, to have enjoyed his affections. Fiction of course, but the real Ton Up is out there, somewhere.

It’s common currency among City types of a certain age to say that the Square Mile is no fun any more… and to add “apart from Lloyd’s”, of course.

Last year, Lloyd’s banned drinking during office hours. Mostly missed in the coverage was that this didn’t extend to the brokers and underwriters who do the business, being aimed just at folk who work directly for Lloyd’s.

If you wander over to Leadenhall Market any day from lunch onwards, you’ll find the pubs still frequented by insurers clutching pint pots.

They’ve done their deals in the morning and are now on the hunt for a gossip, a laugh and the chance meeting that could lead to more trade.

Perhaps it’s a bit less gauche than once it was, but the fundamental ethos is the same. Personal responsibility is praised, if not practised, in both work and play. Individuals are encouraged to know their limits, often through extensive testing.

The latest threat to what’s left of the good old days comes in the form of the Senior Managers and Certification Regime, which is as humourless as it sounds.

This has been market tested on bankers for the past two years and came into place for insurers yesterday and for insurance brokers next year.

The gist of SMCR is this: if one of your underlings does something naughty, the Financial Conduct Authority will hold you to account.

The FCA says this will “improve conduct at all levels” and must not be treated as “a box-ticking exercise”. They mean it.

In the banking trade this has led to ridiculous levels of stress, as otherwise competent managers fretted about what Trader Steve, the guy at the back they never really understood, has truly been up to and if they could end up in prison for it.

A mate of mine collapsed on London Bridge with the stress of it, and left banking (he’s much better as a result).

Richard Burger of international legal business DWF defends the bankers caught up in the tangle of SMCR and says the lives of strong men and women have been ruined, partly because the FCA’s processes are so protracted.

An investigation can begin with apparent thunder as ambitious young prosecutors seek out and believe they have found wrongdoing, only for the inquiry to be suspended for a year while the FCA dobs about. The bankers are left in limbo. They can’t work, can’t prove their innocence and a stench hangs over them.

If bankers’ lives have been made harder, few outside the City are likely to feel much sympathy. They are people too, though (some of them).

In truth, there hasn’t yet been an avalanche of enforcement action against individual bankers since the regime came in to law.

Perhaps banking had already self-policed, already turfed out the lunchtime boozers and wannabe Nick Leesons.

I’d say insurance has not: it is — perhaps always has been — a wilder place. Folk who spend the mornings calculating which war zone is likelier also to suffer a hurricane turn devil-may-care in the afternoons. If their staff aren’t in the pub with them, who knows what they are up to?

Insurance presents less systemic risk than banking — if ships sink, that’s bad for the insurers and the passengers, but it doesn’t hit the rest of us.

But finance is intertwined so, as Burger points out, “any regulatory shot aimed at a banker can miss the target and hit an insurer”, and regulators are keen to get some insurers.

Bankers say that one of the main problems with SMCR is that it encourages, even forces them, to watch their back rather than do the right thing.

It will be interesting to see how this plays out and whether finance professionals learn rare solidarity.

First they came for the bankers…

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Google invests in London property tech start-up AskPorter

2018-12-12 03:18:20 admin

Google has agreed to invest in London-founded Artificial Intelligence-led property start-up AskPorter, the Evening Standard can reveal. 

The search engine giant has provided a “significant” amount to help Clerkenwell-based online management firm AskPorter expand.

AskPorter acts as a digital assistant between landlords and tenants, helping set up speedily everything from utility bill payments to arranging cleaning.

It was founded by lifelong friends Tom Shrive and Samuel Tassell, who hail from Raynes Park, in 2016. Earlier this year they also got funding from former Dragons’ Den star James Caan.

The company now plans to boost staff numbers from its current eight, and it will have support from Google’s tech and business development teams.

Shrive, who previously worked as a digital consultant to firms such as ARM and Intel, said: “It’s incredibly exciting to be able to work with the experts at Google to improve the AI & machine learning technology that powers AskPorter.”

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