Brexit Bill Parliament has spent the past 48 hours debating the European Union (Notification of Withdrawal) Bill, which if enacted will result in the invocation of Article 50. Whilst the vote (imminent at the time of writing) will almost certainly go with the Government, the discussion has been about a wrecking amendment tabled by the SNP asking for greater disclosure on the exit strategy prior to invoking Article 50. The House will however get this disclosure on Thursday, in the form of a White Paper; perhaps strategically positioned to arrive one day after the vote.
May Visits Trump Theresa May visited the US last week, in what has been a controversial week for the new President. Criticised by Jeremy Corbyn for not taking a firm enough stance with Trump on his policies on refugees, torture, and climate change, May responded by describing the US as, ‘our most important ally,’ and about Corbyn: ‘He can lead a protest – I’m leading a country’. But how important is the US to the UK economy and property sector? The US is the world’s largest market, has the world’s largest private sector and is our single greatest sovereign importer (albeit the EU bloc is much larger). Its top imports are electrical equipment, machinery and vehicles (our biggest export). Presently, we have approximately equal imports and exports with the US (c.$50bn), and last year the UK office market benefitted from c.£6bn of US capital inflows. A relationship worth keeping.
Small but powerful ‘From dynamic start-ups to established family firms, our small and medium sized businesses are the backbone of our country.’ So said Theresa May upon becoming PM last summer. But how important are small businesses to the landlord? A staggering 99.9% of UK businesses are classified are SMEs, whilst 75% only employ their owner. However, 40% of all employment and 53% of turnover is delivered by the remaining 0.1%. This is understandably where large office investors focus their attention. However small businesses / start-ups are shown to be less pro-cyclical, have the ability to scale quickly, and in many cases (particularly in the tech sector) contribute relatively more Gross Value Added. Could the growth of co-working be the tool that unlocks this attractive tenant pool to the institutional landlord?
Have you had your Weetabix? Weetabix has announced its intention to invest £30m in its facilities in Northamptonshire. The manufacturer sources its wheat locally, and exports a significant amount, which is now worth relatively more given the fall in sterling. The investment is intended to drive capacity, and innovation in its product line. The latter reflects changing social trends where only 50% of people now eat breakfast at home (maybe it’s due to the rail strikes) resulting in the new Weetabix-on-the-Go range. Abbreviated leisure time across the UK is causing many businesses to reconsider work-life balance issues and look for synergies for the worker and the employer. Home working is on the rise (twice as many businesses now offer this to their employees than 10 years ago), which over time will impact on demand for office space, and the equally importantly, the specification and use of that space.
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Richard Pickering, Head of UK Research & Insight.