Richard Pickering, Head of UK Research & Insight gives a personal view of the business and role of property in ‘New Europe’ , his weekly email update.
Walloon harpoon Serving as a strong indication of the difficulty in establishing new EU treaties, talks between the EU and Canada have faltered. After seven years of discussions, the Comprehensive Economic and Trade Agreement (CETA) pact remains unsigned, because the local parliament of Wallonia (a small Belgian region comprising 0.7% of the EU population) has refused to endorse it. Under the Belgian constitution, support from the region is required in order to give the country’s seal of approval. And under the EU constitution, Belgium’s approval is required to ratify the Agreement. Whatever the final outcome, what hope for an UK-EU treaty in two years?
Quivering hands “Hands are quivering over the relocate button,” states Anthony Browne, Head of the British Bankers’ Association, this week – putting the cat among the pigeons. Writing in the Observer, Browne considers: “Many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year.” These comments represent an escalation in the rhetoric from contingency planning to actual moves, although no names were mentioned.
Chocks away Giving the green light to a project described by Boris Johnson as “undeliverable”, the Government has selected Heathrow as the location for a new South East runway. Heathrow was the choice of business, and this will be seen as long overdue news and a shot in the arm for the UK’s international credentials. Furthermore, research commissioned by Cushman & Wakefield suggests that the new runway will double demand for industrial space in the period to 2030 within an identified wedge to the west of London, already the highest rented location in the country. However, there are also casualties. The project will require the compulsory purchase of at least 750 homes. Perhaps those homeowners in Harmondsworth will take solace in the fact that the market value of their properties has risen over 50% in just the past five years – the cost of delay.
Brief Respite? Two reports out in the past week paint a picture of a challenging outlook for UK law firms. PwC’s 25th Law Firms’ Survey notes that spare capacity within firms (19%) will put pressure on profits, as firms are driven to consolidation (e.g. Olswang, Nabarro, CMS), and investment in technology platforms. Meanwhile, The Lawyer has published its UK 200 report, which reports that 70% of lawyers believe that trading conditions will be tougher in 2016/17 than in 2016/15. The biggest single risk to performance is cited as Brexit, with technology and cyber coming in second. This comes as further evidence that gains in regulatory work will be offset by falling transactional volumes.
Richard Pickering, Head of UK Research & Insight.