2024 Business Predictions: Paul Morris, development director, St James Securities
It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Paul Morris, development director at St James Securities.
I always like to start a year on a positive note, and I do see light at the end of the tunnel, having worked through the challenges faced in the previous year.
We have survived another tumultuous year for the UK economy, with record inflation, multiple interest rate rises, supply chain issues, and higher construction costs presenting challenges for the construction sector. Build costs have continued to climb and values soften, which has caused viability challenges.
Looking forward, however, as we prepare for a rebound from the economic slowdown, this should begin to stabilise, which should stimulate activity across various sectors.
Lots of schemes stalled in 2023, leading to a drop in output. I expect there to be a modest growth this year, which, although not at the same levels as 2022, is nevertheless a sign of positive change and should foster increased consumer and business confidence.
Subject to no more destabilisation caused by wars, inflation will continue to drop, but whether we hit the Office for Budget Responsibility’s (OBR) prediction of 2.8% is a subject for discussion.
I believe bank interest rates will come down slightly and sooner than imagined. I think we will see a half point reduction by mid-2024. We are already seeing changes in the bond market with government stocks starting to come down.
If bank rates and interest rates continue to come down, property yields will sharpen and values will start to go up, which will begin to bridge the viability gap.
The housing shortage led to significant growth in the Build to Rent (BTR) sector in 2023, which shows no sign of slowing down in 2024. In fact, the BTR sector remains one of the few sectors that continues to go from strength to strength.
Lots of money is available to be invested in BTR schemes, but finding the right deals remains challenging. The relationship between construction costs and property values is an issue too, but I do predict we will see a pick-up in values during the year.
Here in Derby, we are currently considering additional phases of housing including more BTR as part of the £230m Becketwell development, which will meet the demand for high quality housing in the city centre.
The hotel market also remains strong, and I see the demand for new beds across the board from budget to higher end continuing to increase over the next few years.
More and more businesses are reassessing their accommodation strategies and considering a move towards flexible office space, and this is set to continue into 2024 and beyond, with hybrid working now part of the fabric of the workplace.
Wavensmere Homes partners with Down to Earth Derby on Nightingale Quarter community garden
Wavensmere Homes has commissioned Down to Earth Derby to create an expansive community garden within the 18.5-acre Nightingale Quarter, in Derby city centre. If the £40,000 pilot project is successful, it will be rolled out across the housebuilder’s city-wide development portfolio.
Linked with Cornwall’s eco-focused Eden Project, Down to Earth Derby is the Community Interest Company (CIC) behind the city’s Electric Daisy attraction. By connecting the urban community with nature-based activities and a diverse events programme, it has become a nationally recognised symbol of the ambitious regeneration and revitalisation of the burgeoning East Midlands city.
Once the designs for the community garden at Nightingale Quarter have been finalised, the work to transform the outdoor space into a magnet for nature, wildlife and people will commence. The interactive garden and allotment space is expected to be unveiled during late spring 2024.
James Dickens, Managing Director of Wavensmere Homes, said: “When I first visited Electric Daisy last year, I was inspired by the way local people of all ages are brought together throughout the week to enjoy and learn about the power of nature. As Derby’s most active residential developer, I could see the opportunity to create something very special and spread the infectious ethos of Down to Earth Derby to our developments.
“What we will be delivering at Nightingale Quarter in the coming months isn’t part of a planning obligation. I am very proud and excited that this pilot project will be a living test bed that could ignite a national appetite for funded community gardens.”
Nightingale Quarter has brought about the restoration and redevelopment of the Derby Royal Infirmary, including the two iconic pepper pot buildings – built in 1894. Pepper Pot South will be transformed into a residents’ gym and community meeting room, once the 925 new houses and apartments complete in 2025.
Pepper Pot North accommodates The Fulton Partnership’s £1m Pepperpot restaurant, which is opening on 14th February. Construction is also well underway for MacArthur House, which will contain 118 one- and two-bedroom apartments. Situated at the front of the development, overlooking London Road, construction work on a final residential building is due to commence later this year.
Jamie Quince-Starkey, founder of Down to Earth CIC, said: “My mum worked at the Royal Derby Infirmary, so to have the opportunity to create a community garden at the Nightingale Quarter development fills me with pride.
“James and the Wavensmere team understand the importance of purposeful living and the wellness benefits of inspiring people to be active and engaged with nature and gardening. Regular allotment meet-ups can be the catalyst to bringing a new community together, while also having a transformative impact on mental health.
“With biodiversity net gain becoming a planning obligation for all future developments, we are already looking into impact reporting that could measure the tangible benefits of the Nightingale Quarter community garden, and hopefully many more to come.”
Down to Earth Derby sees the key to success of this pilot project being regular facilitated sessions, events for all ages, and garden maintenance throughout the year. The facilitated sessions will be designed to empower residents to actively participate in the care and maintenance of the space, promoting a sense of shared responsibility.
By working alongside residents, the organisation will aim to instil a sense of ownership – reducing the need for paid upkeep – while creating a sustainable and community-designed outdoor sanctuary.
A food forest, woodland zone, clean composting area, raised planting beds, bug hotels and bird house making are amongst the detailed plans for the Nightingale Quarter community garden.
Florence Nightingale lived in Derby for three years and was instrumental in designing the Royal Infirmary hospital, which received the Royal Stamp of Approval when it was opened by Queen Victoria in 1894. An original statue of Queen Victoria has been preserved and restored by Wavensmere Homes to ensure her legacy stands strong.
Wavensmere Homes has submitted plans for the 11.5-acre (4.96Ha) historic Friar Gate Goods Yard elsewhere in central Derby, which could be transformed into 276 houses and apartments, and over 110,000 sq ft of commercial space. The firm has also submitted planning with Wilson Bowden Developments for 186 apartments, occupying one of the final plots of development land within Derby’s newly revitalised Cathedral Quarter.
In late 2023, Wavensmere Homes received the green light from Amber Valley Borough Council for its revised plans for the £22m redevelopment of Milford Mills, which overlooks the River Derwent, located between Belper and Duffield in north Derbyshire. 69 new homes will now be delivered on the historic site, which is within the Derwent Valley Mills UNESCO World Heritage Site.
Planning permission granted for new mixed-use scheme in Glen Parva
IMA Architects has successfully secured planning permission for a new mixed-use development in Glen Parva, Leicester.
Working in partnership with its client Anglia Healthcare the plans will see the redevelopment of the current Anglia Healthcare and Mobility shop on Little Glenn Road to create a mixed-use scheme with retail on the ground floor and residential across two floors above.
IMA’s plans feature a more modern aesthetic that makes best use of the plot, maximising on space available. It will include much needed, high quality residential units comprising seven duplex apartments.
The ground floor retail space will become Anglia Healthcare’s new mobility showroom. It will provide a much-improved retail space for the company with associated office space, amenities and parking.
Anthony Day, Managing Director of IMA Architects, says: “Securing planning permission for this site had been a complicated process. When we were brought in, the process had already been going on since 2021 so I am pleased that our designs for this area of Little Glen Road have been approved and that work will soon begin on site.”
Ideagen moves closer to next acquisition
Ideagen has moved a step closer to strengthening its environmental, health and safety (EHS) capability after Damstra, an Australian EHS business listed on the Australian Securities Exchange, entered into a Scheme Implementation Deed with the Nottingham-headquartered software company.
Under the terms of the scheme, Ideagen will acquire 100% of the fully diluted share capital.
The Damstra Board (including the independent board committee formed for the purpose of considering the Scheme) unanimously recommended that Damstra shareholders vote in favour of the Scheme.
Ideagen CEO Ben Dorks said: “Ideagen provide regulated industries with the clarity and confidence to turn risk to resilience, and the addition of Damstra’s market-leading workforce and asset management solutions will enhance this.
“We’ve made significant investment in the Asia Pacific region and intend to continue to grow our presence in Australia. Existing Damstra customers will benefit from Ideagen’s broader resources and we intend to use our global footprint to introduce Damstra’s capabilities to a wider customer base.
“It’s a great fit into our existing portfolio and we’re excited about the product and its people, driving great value for customers.”
Profit warnings from UK-listed companies in the Midlands fell by 21% in 2023
Listed companies in the Midlands issued 31 profit warnings in 2023, a decrease of 21% on the previous year, according to the latest EY-Parthenon Profit Warnings report.
In Q4 2023, nine warnings were issued by companies in the region, the same as Q3 and the highest quarterly total since Q4 2022. The number of warnings issued during this quarter is down by over a third (9) on the same period (October – December) in 2022.
Companies within the Midlands operating in Industrial and Consumer Discretionary FTSE sectors continued to issue the highest number of profit warnings (eight) in Q4 2023.
This is comparable to the broader national trend, with FTSE Consumer Discretionary sectors issuing the most profit warnings in the UK during Q4, accounting for 35% of all warnings during this period.
Dan Hurd, a partner at EY-Parthenon in the Midlands, said: “Pressures caused by high inflation rates continued to effect businesses in the region and while this will ease as we navigate 2024, growth is likely to remain slow. Many companies will also continue to face challenges with high debt service costs and ability to refinance.
“Traditional funders will be cautious in investing in sectors with high consumer discretionary exposure and businesses may need to look for new avenues for capital, such as sourcing alternative lenders or seeking equity injections.
“The volatility of global events, including the forthcoming US and UK elections will create an element of uncertainty which will inevitably affect the economy, however, regardless of the outcome of these events, businesses will need to focus on the fundamentals and plan ahead if they are to remain resilient.”
York IT services provider acquires Kettering business
boxxe, the York-based IT services and solutions provider, has acquired Kettering-headquartered Total Computers.
boxxe owner Phil Doye had previously acquired a minority stake in Total Computers in November 2022. Total has a rich heritage as a partner of choice for many of the UK’s most successful and recognised companies, and through its own acquisition of Overbright in 2022, it added deep digital transformation expertise.
This acquisition creates one of the UK’s largest providers of software, solutions and services to both the public and private sector.
boxxe has grown rapidly since Phil Doye acquired the business in 2019, with revenue for 2023 expected to be around £440m.
Phil Doye said: “I had known and admired Total for many years but as a shareholder and director for the past 12 months I have seen firsthand the depth of what Aidan and Kevin have built.
“The combination of these two businesses is uniquely complimentary and I am hugely excited that this move will enable both companies to better serve our customers and partners.”
Aidan Groom, CEO of Total Computers, said: “Working with Phil over the past 12 months has challenged our ambition for what Total can become. We have created something special at Total, but this is the next step in the evolution of our company.
“For both companies it allows us to grow faster and become even more relevant to our customers through a wider range of partner accreditations, deeper technical skills and greater financial strength and scale.”
Kevin Goodall, who has become Managing Director of Total, said: “The most common feedback I get from our customers is that we want to do more with you, but you don’t have the financial scale or range of partner certifications that Computacenter, CDW or Softcat has.
“To be part of the boxxe group is hugely exciting as it gives us a more complete portfolio and financial scale that enables us to think bigger and be even more ambitious.”
Doye added: “The IT channel has, over the past number of years, seen the largest players get bigger and the small ones either specialise, struggle or get acquired.
“This deal marks a pivotal moment in the journey of boxxe. With the acceleration of digital transformation, the continued growth of public cloud and the proliferation of software companies it’s critical that a partner can deliver across this landscape.”
Boston Borough Council refuses to support proposed devolution deal
Boston Borough Council says it cannot support the Devolution Deal that is proposed for Greater Lincolnshire.
After seeking views from all Councillors, the Leader of the Council, Councillor Anne Dorrian, has now formally written a response on behalf of the council to a consultation into the proposed deal and Mayoral Combined County Authority arrangements.
At Full Council on Monday 15 January, Councillors voted unanimously to reject the proposals in their current form, with specific concerns relating to the deal itself and its governance, which Boston Borough Council says at present does not give all District/Borough Councils a voice on the Mayoral Combined County Authority.
The Deal negotiated with Government by the upper-tier councils includes:
- £24m per year for 30 years.
- £28.4m to Greater Lincolnshire for 2024/25, to be allocated prior to the Mayoral Combined County Authority being established in 2025.
- The devolution of strategy and budgets related to skills; and multi-year transport budgets, with flexibility to allocate funds to local priorities.
Planning secured for north Leicester logistics development
Boundary Real Estate has secured outline planning consent from Charnwood Borough Council for Phase 2 of Watermead Business Park.
The development of up to 656,620 sq ft of warehouse/industrial space is to provide a gateway location into Leicester and inject capital into the region, providing substantial employment and economic growth.
It is anticipated that up to 918 permanent and 447 temporary jobs will be provided through the development of employment space.
The 76.77 acre site, part of the Raynsway portfolio, acquired by Boundary in 2022, is located between the towns of Thurmaston, Wanlip, Birstall and Syston, approximately three miles north of Leicester City Centre.
Mike Morrison, founding partner of Boundary, says: “At Boundary we strive to regenerate and reposition our investments to create sustainable space/accommodation for our tenants to thrive within.
“We have been working extremely closely with Charnwood Borough Council, Leicester City Council, The Mayor and various regeneration groups, along with our design and planning team, to develop a regeneration that not only provides jobs and growth for the region, but is also is an exemplar in environmental terms.”
The new development will target a BREEAM Excellent rating. A full Life Cycle Assessment will be undertaken, ensuring that the design, construction and operation of the buildings meet the highest environmental standards. Importantly for best-in-class operators/tenants, the buildings will also target EPC A ratings.
Mike adds: “The new development will aim to set best-in-class embodied carbon targets for all the buildings being developed. By focussing on construction methods, we can target Watermead as a Net Zero Carbon development from a construction standpoint and ultimately in use too.”
EV Charging points will be installed, along with electric bikes. As part of the scheme’s Travel Plan, further measures and incentives will be put in place to encourage sustainable travel modes to the site.
Bellrock acquires mobile data collection solutions firm
Leicester-based Bellrock Property & Facilities Management Ltd has acquired Mobiess Ltd, a provider of integrated mobile data collection solutions to the Facility and Asset Management sector.
Founded by MD Karl Horner in 2009, Mobiess employs 20 people who design and deliver integrated mobile data collection solutions which empower organisations to transform service delivery and optimise workforce productivity.
The Mobiess management team has over 50 years of collective experience in delivering services to clients across the Facilities and Asset Management industry.
Mobiess will sit under Bellrock Technologies under Managing Director, and CTO, Adam Smith. The Mobiess integrated mobile workforce management solution will complement Bellrock’s Concerto software platform. The combined offer provides a fully integrated Workplace Management System (IWMS) and Computer-Aided Facilities Management System (CAFM) for estates, asset, and workforce management, which delivers actionable insights for clients.
Mobiess will continue to provide their applications as an open independent platform enabling integration to any business system.
Karl Horner, Managing Director, Mobiess, said: “I believe that Mobiess will truly transform Bellrock’s field service delivery. I am looking forward to introducing Bellrock customers to Mobiess, and exploring the insight and value this will deliver alongside Concerto’s powerful capabilities. I am also excited by the opportunities that will come from collaboration between our brilliant Mobiess and Concerto people. This is an exciting time for us all.”
Paul Bean, CEO, Bellrock Property & Facilities Management, said: “Since 2009 Mobiess has delivered solutions which deliver value for clients in the property market; I am delighted to welcome such a highly regarded team and proven product to Bellrock. This acquisition continues our investments in capabilities that strengthen our tech-enabled suite of property management services that help clients achieve their strategic objectives, whilst delivering growth for Bellrock Group.”
Adam Smith, Managing Director, Bellrock Technologies, and Chief Technical Officer, Bellrock Group, said: “I’m thrilled to personally welcome Mobiess into the Bellrock Group. Having seen first-hand the synergy between Karl’s team and ours, I’m confident that this is a perfect strategic and cultural match for us.
“Their innovative products and expertise are a natural complement to our ambitions at Bellrock Technologies. The integration of Mobiess with Concerto, enhances our mobile app offerings, providing a superior Integrated Workplace Management System (IWMS) with a fully customisable suite of mobile applications. I look forward to working closely with the Mobiess team to continue the development of the Mobiess product.”
2024 Business Predictions: Steve Fernie, director of Armsons Barlow
It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Steve Fernie, director of Armsons Barlow.
I believe 2024 will be a pivotal year for both our country and the construction industry.
I anticipate continued growth in the construction industry, particularly with warehousing and logistic hubs, serviced office accommodation and Built-to-Rent (BTR) and Private Rental Sector (PRS) residential developments.
A major area of concern are town centres where there appear to be many empty retail units. Somehow a new purpose and use for these properties needs to be found or we as a country run the real risk of many of our town centres becoming ghost towns and lost for the next generation. To prevent this happening, I believe we have to have a more relaxed planning policy, which will allow these buildings to be re-purposed.
In terms of other predictions, I expect inflation to stabilise at 3%, which still remains above the government’s target. Interest rates will start to fall, but mortgages will remain expensive for the younger generation.
I forecast a change of government, with a coalition led by Keir Starmer taking control. I believe unemployment will remain static at its current level. Economic growth will remain poor, but a technical recession will be avoided.
Like most years, what happens in the UK will, to a certain extent, depend on what happens in the United States and China.
I also anticipate that Covid will continue, although it will be largely ignored by the media.
