< Previous10 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk FINANCE NEWS Digital agency launches small business fundraising site Digital agency Frogspark has designed, built and launched a micro fundraising platform in 24 hours following an idea that was generated nearly 2 years ago. Frogspark has launched Don8mini in a plea to help small, independent businesses – even in a small way. Whilst the business community navigates through the COVID-19 pandemic – it’s still important we look after who we can. The idea is to provide a simple way to donate the equivalent of a small, everyday item to a local or independent business that would ordinarily get that revenue. For example if you would ordinarily without thinking spend £2.00 a few times per week on a Latte – would it be so much of a strain to donate that to a business in need right now? Rob Twells, Managing Director at Frogspark said: “I had the idea a couple of years back. I know that I buy coffees like they’re going out of fashion, pints at the pub and food here and there without “It’s the businesses that produce or sell these types of items that are going to feel the strain more than anybody right now. What if a few of us just donated the price of one coffee or one pint to one of these businesses – that would make an impact. If we can fundraise just a little, for a few businesses we love in the area, that would at least bring a smile to somebodies face.” Right now, Frogspark is just picking one business to highlight on rotation based on who they like, want to support, or use regularly. There are plans to introduce polls to pick the next business and choose based on the outcomes of that. Frogspark will be handing funds raised directly over to these businesses. E-commerce fulfilment specialist secures £11m investment Northampton-based James and James Fulfilment has secured an £11million investment from mid-market private equity investor LDC, part of Lloyds Banking Group, to further enhance its software-enabled e-fulfilment proposition. James and James provides online order fulfilment to e-retailers, storing products, packing and shipping orders, and handling any returns. This enables clients to increase order volumes, enhance customer experience, and improve stock and inventory management. The business supports its clients from its operating bases in the UK, USA and New Zealand. In the last three years, revenue at James and James has grown by 50% pa to £17.4million, and the firm currently employs more than 100 people worldwide. LDC is partnering with the management team led by Founder and CEO James Hyde, COO Neil Sant and CFO Simon Lisser. LDC’s investment will support the management team to invest in a new larger UK fulfilment centre, further enhance its technology proposition, and expand the business’ client service and commercial functions. The deal was led by LDC Investment Director Chris Baker and Investment Manager James Garland. As part of the transaction, Chris Baker and LDC’s Lawrence Dean will join the board of the business as Non-Executive Directors. James Hyde, Co-Founder of James and James Fulfilment, said: “James and I created the business to challenge the industry and create technology-led solutions which are fit for today’s rapidly-evolving online retail market. The logistics industry has generally been behind in its adoption of technology, but the demand for more modern systems is greater than ever. “Over the last few years, we’ve been on a strong growth trajectory and are investing more than ever in our in-house fulfilment platform. With LDC’s experience in the tech space and confidence in our business plan, they will be a great partner to help us deliver even more value to even more brands and retailers.” East Midlands caravan firm acquired by investment company Robinsons Caravans Ltd, a caravan and motorhome business which has been trading for more than 50 years, has been acquired by MBH Corporation plc, a UK public company offering a new approach to SME investment. Established in 1963, Robinsons is a family-owned business with sites in Chesterfield and Worksop. The company has been acquired for a sum between £7.2m and £8.6m, which includes the net assets of approximately £2.5m. Robinsons is the 11th company to join MBH and establishes a fifth industry vertical, Leisure, alongside Education, Construction Services, Engineering and Health. The Leisure vertical will be led by Paul Seabridge, CEO of Robinson Caravans. Established in 1963, Robinsons sold 1,200 units during its 2019 financial year and generated unaudited revenues of £18m and an EBIT of £1.05m. The acquisition brings the pro-forma revenues of MBH group portfolio companies to over £125m. MBH, which is based in London and listed on the Frankfurt and Düsseldorf stock exchanges, acquires established, debt-free, profitable small businesses. Business owners exchange their shares for shares in MBH. They retain their autonomy and can grow their business as part of a plc. Callum Laing, CEO of MBH Corporation plc, said: “We are looking forward to establishing the new ‘Leisure’ industry vertical in MBH Corporation plc. The Robinsons Caravans team bring with them generations of experience in their industry, making them the perfect leaders of the new group. Their ambition to grow through acquisitions allows MBH to support them in one of the many benefits of joining this growth platform, and we look forward to encouraging them to do that as part of the group.” Paul Seabridge, CEO of Robinsons Caravans, said: “The caravan and motorhome industry is very fragmented and as such we felt joining forces with MBH, by joining the group, would provide a better platform to take advantage of this. “There are a number of operators and being part of a diversified investment vehicle and having access to the public markets means consolidating some of the operators through acquisitions, providing a tremendous opportunity to quickly take advantage of this – we want to build the number one caravans and motorhome group providing a superb experience for customers and staff as we go on this exciting journey with MBH together.” Callum Laing, CEO of MBH Corporation plc Rob Twells, Managing Director at Frogspark and Liam Nelson, Technical Director 06-15.qxp_Layout 1 02/04/2020 14:09 Page 5www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 11 FINANCE NEWS Mattioli Woods acquires asset management business in £25.6m deal Mattioli Woods, the Leicester-based specialist wealth management and employee benefits business, has entered into a binding agreement to acquire 100% of the issued share capital of Hurley Partners Limited, the private client adviser and asset management business with offices in London, Surrey and Manchester, from its shareholders. The £25.6 million deal will allow Mattioli Woods to extend its geographic footprint and adds experienced advisers to the Group’s consultancy team. Completion of the deal is subject to regulatory approval and expected to take place in the second quarter of 2020. Founded in 2013, Hurley is an established wealth management business with specialist pension expertise and a discretionary investment management offering. The business employs 33 staff and Hurley’s management team will be retained by Mattioli Woods following the acquisition. In the year ended 30 April 2019, Hurley generated revenues of £5.68 million with a profit before tax of £0.75 million. Ian Mattioli, Chief Executive Officer of Mattioli Woods, said: “This exciting acquisition is an important step forward for Mattioli Woods, as we continue to expand our operations. Our discussions with the management team have confirmed the strong cultural fit and our common approach to looking after clients, where the strategy of growing the enlarged Group with the client always in mind clearly resonates.” Bradburys Cheese matures with £8.5m facility Secure Trust Bank Commercial Finance has provided Bradburys Cheese with an £8.5m asset-based lending facility to increase its working capital, enabling a pipeline of new product ranges and ambitious growth plans with its customer base. Bradburys Cheese has a long, family-owned, history, originally founded in 1884 by Reverend William John Bradbury. It was taken over in 1994 by the Paul family which took the business forward by creating a large range of products including extruding flavours, as well as supplying packaging, distributing and marketing cheese products. The family has taken the firm from a £4m turnover business to revenues in excess of £70m and now employs 180 people across the UK, with its main head office in Buxton. The company boasts over 100 clients across the world, from Australia to Hong Kong and is the sole supplier of cheese to the Falkland Islands. The £8.5m facility provided by Secure Trust Bank Commercial Finance will be used to fund the company’s work in progress, allowing it to increase its working capital and continue to expand into new markets. In particular, the firm plans to invest in the development of a new range of snacking products to further its growth. Michelle Jackson Hanstock, Managing Director of Bradburys Cheese said: “We have big ambitions at Bradburys Cheese and are proud of what we have already achieved as a family-owned business. Our seven-year association with our global airline partner is an important part of our business and we want to continue to evolve in order to attract big clients. Having customers from all over the world, we want to expand on this momentum and push ourselves to create more award-winning products.” Castle Donington fleet driver training provider snapped up RED Driving School, which is backed by the private equity firms Trimountain Partners, Ashridge Capital and Downing LLP, has completed the acquisition of the NFE Group Ltd, based in Castle Donington. The NFE Group is a significant player in the fleet driver training sector and offers a range of training courses to business customers across the UK. NFE traces its roots in the training world back to 2003 and, led by CEO Andy Neale, has developed into a successful provider of fleet driver training with a number of significant corporate clients. NFE is based at Donington Park in the East Midlands and will continue to be led by Andy Neale. With over 1,500 driving instructors, RED Driving School operates throughout England, Scotland and Wales. The Company is headquartered in Billingham, County Durham. RED entered the fleet driver training market in 2018. RED Driving School is led by CEO Ian McIntosh, who joined the business in 2012, and led the business through a secondary buy-out in April 2019. Ian McIntosh said: “RED has developed into one of the most successful driving schools in the UK and it was logical move for us to move into the fleet driver training market. With the acquisition of the NFE Group with its very experienced management team, we will be very well equipped to meet the needs of our clients across the UK, and further consolidate our position in this very important market for us.” Andy Neale of the NFE Group said: “NFE has worked hard to get to where it is in the fleet risk management industry and has also developed a leading position in the health and wellbeing market related to driver training. Now with the support and backing of the RED team, we are very excited about the future opportunities that this will bring. Having spent some time looking around for the right fit we are delighted to be joining the RED brand to continuing our journey.” © Shutterstock /Ubermensch Matt Michelle Jackson-Hanstock and Stephen Dillon in one of the processing rooms where the cheese is handpacked. Photograph by Richard Grange/UNP (United National Photographers). Ian Mattioli, Chief Executive Officer of Mattioli Woods 06-15.qxp_Layout 1 02/04/2020 14:09 Page 612 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk MANUFACTURING NEWS Toyota and JCB stop production in Derbyshire Toyota and JCB have stopped production at their Derbyshire plants. Toyota said the move was in light of the acceleration of the current coronavirus pandemic in Europe and its social and economic impact. A statement from Toyota said: “We make decisions based on the safety and security of our employees and stakeholders and in consideration of those currently dealing with this outbreak. We will continue to take action in a timely manner in this very dynamic situation. Moving forward, we will continue to base our decisions on the guidance we receive from authorities in each country and region. “Across Europe, Toyota entities have implemented a series of measures in line with health authorities’ recommendations in support of their efforts to prevent or slow down the spread of COVID-19, such as: additional hygiene, and cleaning measures; information sharing; request to work from home for office staff; travel restrictions; elimination or postponement of non-essential events or meetings; and social distancing. “With the acceleration of the coronavirus in various European countries or regions and the associated “lock-down” measures taken by various national and regional authorities, an uncertain short-term sales outlook and difficulties in logistics and supply chains are being felt and will increase in the next weeks. “TME has consequently decided to organise a progressive suspension of its vehicle and engines/transmissions production plants in Europe starting on 18 March until further notice.” This includes the firm’s plant in Burnaston. JCB meanwhile noted it was stopping production at all of its UK manufacturing plants as disruption resulting from the worldwide Coronavirus pandemic causes an unprecedented reduction in global demand. The company halted production at its nine manufacturing plants in Staffordshire, Derbyshire and Wrexham. Precision engineered polymer solutions provider snaps up Leicester manufacturer Leicester-based Nylacast, the precision engineered polymer solutions provider, has completed the acquisition of Viva Nylons as part of its expansion plans. Also located in Leicester, Viva is a manufacturer of cast nylon semi-finished products and delivers a wide stock range of plates, rods and tubes to distributors and machining centres across the globe. The recent acquisition forms part of Nylacast’s wider growth strategy and commitment to offering value-adding engineered solutions to its customer base of manufacturers from industries including construction, transport, pharmaceuticals, defence, marine and energy. Mussa Mahomed, Nylacast Group CEO, said: “We are delighted to welcome Viva Nylons to the Nylacast group. This acquisition brings together two successful, engineering-led companies at the forefront of polymer technology. It is also intuitive to our increasing demand for capacity and expansion.” The acquisition was agreed at an undisclosed sum and will see Viva Nylons become a wholly owned subsidiary of Nylacast, preserving its brand for the foreseeable future. Steve Aldred of Viva Nylons said: “It’s incredibly exciting for the Viva Nylons team to now be part of the much bigger Nylacast family. For the employees of both companies it’s a fantastic opportunity to share experiences and develop further together.” Nylacast currently has three manufacturing plants in Leicester along with its World Headquarters. The engineering firm has additional plants in China, South Africa and the USA. New engineering centre opens at Boston College The Business Minister Nadhim Zahawi MP has opened the Engineering, Manufacturing and Technology Centre (EMAT) at Boston College. The new £4.3 million state-of-the-art centre was developed with funding from the Greater Lincolnshire Skills Capital Investment Programme (administered by the Greater Lincolnshire LEP) and the Midlands Engine. It provides an industry-driven training facility that will stimulate growth and productivity across the sector with its workshops and suites. Acting as a hub for local engineering and manufacturing, the centre offers the opportunity for agritech businesses to create a partnership with the college to help train the engineers in line with industry needs. EMAT includes an innovative hub, two workshops that will provide space for traditional engineering and manufacturing skills and modern industry practices, an electronics laboratory, a Computer Aided Design and Manufacture (CAD/CAM) suite, three classrooms and a break-out space. Mr Zahawi was taken on a guided tour of the facility, where he talked to learners who are currently training to become engineers of the future, before officially opening the centre. “The new facility at Boston College brings together some of the UK’s finest academics, students and local businesses, all of whom will be instrumental to helping us realise the UK’s engineering and manufacturing potential,” he said. Nadhim Zahawi (fourth from left) with representatives from Boston Council, Greater Lincolnshire LEP, and Boston College. 06-15.qxp_Layout 1 02/04/2020 14:09 Page 7www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 13 MANUFACTURING NEWS Ibstock suspends production at manufacturing facilities Leicestershire-based Ibstock, the manufacturer of clay bricks and concrete products, has temporarily suspended production at its manufacturing facilities. The decision comes in light of the Government’s escalating measures to contain the spread of the virus, and in order to ensure the health and safety of employees, customers and other stakeholders. In addition to the temporary suspension of manufacturing operations, the company has taken a number of actions to reduce operating costs across the Group and will defer non- essential capital expenditure. The capital expenditure associated with the recently announced redevelopment of Ibstock’s Atlas clay brick manufacturing facility has not yet been contractually committed and the project has been put on hold. Ibstock has also cancelled the 2019 final dividend payment of 6.5 pence per ordinary share (total cost of £27 million). The company intends to participate in the UK Government’s job retention scheme. Manufacturing output expectations dropped to their weakest since the financial crisis, as the COVID-19 outbreak gained pace in the UK and Europe. That’s according to the latest CBI monthly industrial trends survey conducted between 25 February and 13 March. In another early sign of the impact of the pandemic, the survey of 288 manufacturers reported that both total and export order books worsened considerably on February. Manufacturing output volumes fell in the three months to March, but at a roughly similar pace to February. This marks the sixth month in a row of falling output in the sector. Nine out of the 17 sub sectors reported output volumes expanding, led by the chemicals, food, drink & tobacco, and electronic engineering sub- sectors. However, growth in these sectors was offset primarily by a sharp drop in output in the motor vehicles & transport equipment sub-sector. Respondents also stated that stock adequacy for this month was roughly in line with its long-run average. Output prices are expected to rise somewhat in the next three months. Anna Leach, CBI Deputy Chief Economist, said: “The manufacturing sector is facing unprecedented challenges due to COVID-19, such as widespread disruption to supply chains and weakening demand due to domestic containment measures. “With expectations for output set to fall in the coming months, it’s now more important than ever manufacturers get the support they need.” Derbyshire manufacturer targets growth A Derbyshire-based manufacturer is accelerating its growth plans after investing close to £1 million in new machinery with the support of Lloyds Bank Commercial Banking. All British Precision, which provides precision-machined components to the aviation, automotive and healthcare sectors, acquired the new state-of-the-art equipment with the support of a £950,000 asset finance facility from Lloyds Bank. The new machinery, provided by DMG Mori, will enable the firm to expand production capacity by automating elements of its high-end precision milling and turning operations. Meanwhile, the ability to turn larger and heavier components has allowed the business to develop its product capabilities and target new markets, as a result. The funding, which forms part of Lloyds Bank’s expectations to lend up to £2.5 billion to firms in the Midlands in 2020, is the latest chapter in eight years of sustained growth since the firm’s incorporation in 2012. The Ashbourne-based firm has boosted turnover by 400 per cent to £2 million and seen its employee base grow from five to 27. All British Precision was formed following the merger of Howardson Engineering and Medicione Ltd. Richard Allen, Managing Director at All British Precision, said: “The recent purchase of three new CNC machines has been a real game-changer for us in terms of the level of outputs we’re able to deliver and the types of sectors and clients we’re now able to target.” © Shutterstock /1968 Richard Allen and Ian Howard, joint owners of All British Precision, with Chris Perkins (R) and Lee McAllister (L) from Lloyds. © Shutterstock /Bandit Chanheng 06-15.qxp_Layout 1 02/04/2020 14:09 Page 8PROPERTY NEWS Construction work begins on new Agri-food Centre of Excellence Construction has started on the University of Lincoln’s bespoke agri-food research and development facility at the new Food Enterprise Zone (FEZ) in Holbeach. The milestone represents the next phase of construction following the ground works which began in summer last year. The building is due to be completed early next year. Willmott Dixon Construction is the main contractor for the build. The Centre of Excellence in Agri-food Technology will be the linchpin of the FEZ, delivering innovation support services, pioneering research, skills provision and knowledge exchange for agri-food businesses across Lincolnshire and beyond. As the first building on the site, the Centre of Excellence will build on the success of the University of Lincoln’s Holbeach campus. It will include microbiology and chemistry laboratories, a high-tech test kitchen and sensory suite, break space, and seminar rooms, and will act as an innovation hub promoting the rapid uptake of advanced technologies such as robotics and automation and ensuring the UK’s agri-food industry remains competitive. Professor Val Braybrooks MBE, Dean of Holbeach and the National Centre for Food Manufacturing, said: “We are delighted to celebrate this milestone and look ahead to the many benefits the new Centre of Excellence will bring to businesses across Lincolnshire and beyond. The agri-food sector and its supply chains are of enormous importance to the county economically, and evolving global food markets are creating unprecedented opportunities for both established and early stage businesses as suppliers of innovative new products and technologies. “This new facility is designed to house a community of leading industrial scientists and their support teams, working to meet the innovation, research and knowledge transfer needs of Greater Lincolnshire’s agri-food businesses.” The FEZ will be located next to the A17 and A151 and is designed to support agri-food businesses, with a particular focus on the food technology sector. When complete, phase one of the multi-million-pound development will create around 16,000sq m of new business space, capable of supporting over 400 jobs. Midlands contractor appointed on £30bn national central government framework Midlands-based contractor G F Tomlinson has been appointed on to the new £30 billion Crown Commercial Service Construction Works and Associated Services agreement, a major national framework for the delivery of public sector construction. The new agreement, which runs for seven years, can be accessed by all public sector bodies to procure a variety of construction projects including schools, hospitals, universities, prisons, office buildings and housing. G F Tomlinson has been selected for the North of England region, which includes the East and West Midlands, to deliver projects valued between £3 million and £10 million. The framework will also provide sustainable opportunities for G F Tomlinson’s local supply chain partners, helping to generate social, economic and environmental benefits within the surrounding communities. Crown Commercial Service supports the public sector to achieve maximum commercial value when procuring common goods and services. In 2018/19, CCS helped the public sector to achieve commercial benefits worth £945million – supporting world-class public services that offer best value for taxpayers. Operating within the Midlands for over 128 years and with offices in Derby and Birmingham, this is the second national, central government framework secured by the regional contractor, following its current appointment on the Department of Education’s Construction Framework. Chris Flint, director and general manager of G F Tomlinson Building Ltd, said: “We are delighted to have been selected onto the new Crown Commercial Service framework, another significant framework to add to our growing portfolio, which is testament to the quality of our staff and processes, which were thoroughly tested as part of the robust competition process.” 14 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk Telephone 0800 009 6066 Email info@nnbcfinancial.co.uk Asset Finance, Leasing, Contract Hire, Sale & Leaseback • Property Development Finance • Commercial Property and Business Mortgages • Factoring and Invoice Finance Representatives meet at a ground breaking ceremony for the facility. 06-15.qxp_Layout 1 02/04/2020 14:09 Page 9Ann Bhatti, head of Connect Derby, and Rachel Titley, head of region at Adair. PROPERTY NEWS Adair relocates to Derby’s Sadler Bridge Studios Chartered surveyors and construction consultants, Adair, have become the first non-creative business to take office space at Connect Derby’s Sadler Bridge Studios. When the company set up its Derby base in early 2019, non-creative businesses weren’t eligible to take space at Sadler Bridge Studios. However, when the rules were relaxed at the turn of the year, Adair’s head of region, Rachel Titley, and her team jumped at the chance to make the move to the building on Bold Lane in the city. The relocation follows a successful few years for Adair, which was founded in 1994 and has offices in London, Surrey and Gibraltar. Its core services are quantity and building surveying, project management, dispute resolution and project monitoring. The move to Derby forms part of the company’s strategic expansion programme with one new job recently created. The three-storey Sadler Bridge Studios managed workspace is located on the site of the former Princes supermarket at the bottom of Sadler Gate. Earlier this year, Friar Gate and Sadler Bridge Studios were given the green light to let up to 30% of their space to tenants from across the creative industries supply chain in order to further promote entrepreneurship within the city. Eligible businesses include professional services firms such as accountants, lawyers, financial services and HR professionals, along with education and training companies. DHL Parcel pre-let unit at Lincoln industrial scheme The second phase of development is steaming ahead at St. Modwen’s 70-acre industrial and logistics scheme near Lincoln with the completion of steelworks. Two units of 25,000 and 55,000 sq ft are set to be delivered at St. Modwen Park Lincoln with one unit already pre-let to DHL Parcel (UK) Limited. The German logistics company, who acquired UK Mail in 2018 is expanding at the scheme and will occupy a 25,000 sq ft unit on a 10-year lease. This is in addition to a 32,000 sq ft unit occupied by its sister company – Deutsche Post DHL – who arrived at the The new units are designed to cater for modern occupier needs with high bays, top specification offices, generous car parking and ample yard space. Phase 2 is expected to be completed by Summer 2020. Nick Kay, Development Director at St. Modwen, said: “To have secured a pre-let with DHL demonstrates a strong appetite for well-located space in the region. The units delivered as part of our first phase of development were quickly taken off the market by two well-respected brands and it speaks volumes that a key player in the logistics market such as DHL has once again chosen to expand with us here at St. Modwen Park Nottinghamshire property developer purchases 231-acre country park KLPG, a Nottinghamshire-based property developer, has purchased Kilvington Lakes, a 231-acre country park, after securing a seven-figure commercial mortgage from HSBC UK. Kilvington Lakes in the Vale of Belvoir is made up of 36 luxury lodges surrounded by woodland and four lakes. The area includes 80 acres of water, used for canoeing and sailing, and is home to some 180 species of bird. KLPG has plans to develop the site in the future and has just been granted planning for second home, residential use on the site, which will further support the development of a sensory centre and retreat for disabled children and their families. Alongside the development of a lakeside spa experience, a community woodland will be opening later this year, with a fishery set to open in 2021. Freddie Reid, Director at KLPG, said: “Kilvington Lakes is one of the Midland’s best kept secrets and a place I have long been fascinated by – the opportunity to purchase the site was too good to miss. “We feel very lucky to have had the support of so many organisations to help us reach this moment, including Philip Aspden, our relationship director at HSBC UK; Trevor Smith and the team at Price Bailey; Nick Laister with RPS Group; and Vik Moothia of Austin Moore.” www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 15 06-15.qxp_Layout 1 02/04/2020 14:09 Page 10Armstrong house Offering a prime position in Grimsby, Armstrong House on Armstrong Street is ideally located. Close to the ports of Grimsby and Immingham, motorway links and the town centre, off-street parking is also available for all staff and visitors, meaning it’s convenient too. Our spacious, welcoming offices are located on the ground floor and are both secure and CCTV-monitored, giving you the ultimate peace of mind. At Armstrong House, the flexible in/out terms of contract mean confidence when it comes to affordability and with a range of office sizes there are opportunities for all types of business. If you require virtual office services, prices start from just £15 per month. For more information, or to discuss your office requirements, give Scotts Property a call today on 01472 267000 and ask about Armstrong House. Last remaining office suites Prime location in Grimsby Superb Location - - Close to the ports of Grimsby & Immingham - Great motorway links - Close to the town centre Secure off street parking High speed internet availability Easy in/out terms A range of affordable office sizes 3 3 3 3 3 Armstrong House, Armstrong Street, Grimsby DN31 2QE Tel: (01472) 310301 • Email: s.fisher@blmgroup.co.uk www.shutterstock.com/terekhov igor www.shutterstock.com/Yentafern 16-19.qxp_Layout 1 02/04/2020 14:15 Page 1www.shutterstock.com/Yentafern www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 17 COMMERCIAL PROPERTY I n less than quarter of a year, COVID- 19, the infectious respiratory disease caused by the coronavirus SARS-CoV- 2, has profoundly impacted the global economy. No sector has thus far been immune to the far reaching and, likely, long-lasting impacts of the pandemic. While real estate isn’t among those worse affected, it is having to contend with economic uncertainty right across the spectrum, from residential through to commercial property. Already we’ve seen lower stock market values, a nosedive in viewings and the postponement of MIPIM, the international property event at which our region was due to send a delegation. Originally scheduled to take place in Cannes in mid-March, the event was first moved to early June and then cancelled this year altogether. At present, however, the coronavirus crisis has made it impossible for investors in UK property funds to value the buildings they own. The reason being is that the outbreak has led to a reduction in the number of investment transactions which provide evidence for property valuations. So valuers can no longer asses their properties with any degree of real certainty and, essentially, it’s putting the brakes on the market. In mid-March, property funds worth in excess of £7 billion closed and, as government measures continue to intensify to combat the spread of COVID- 19, more funds are expected to close in the weeks to come. So long as the pandemic lasts, property funds have been cautioned to suspend. Likely these suspensions and measures will be lifted once more certainly returns to the market but there’s no clear idea of timescale. Boris Johnson announced to the public that the UK was going on lockdown from 23 March. During that announcement, he said that government will be assessing the situation in three weeks from then which hopefully brings with it more clarity. A similar ‘wait and see’ approach has been adopted where sales and purchasing are concerned, with both put on hold as vendors and property purchasers effectively try to wait out the crisis and for further certainty and market clarity. The longer the crisis lasts, however, the more difficult it will be for commercial landlords to service existing debts and to raise capital – which could exacerbate many existing and underlining issues for some commercial 18 Á We explore the impact of coronavirus on the commercial property market and how it’s affecting both occupiers and owners. © Shutterstock /Grand Warszawski Coronavirus Coronavirus 16-19.qxp_Layout 1 02/04/2020 14:15 Page 2operators and owners, especially in the beleaguered retail market. There’s already been many early warning signs that the pandemic could lead to a widespread shuttering of businesses in the retail sector, with ‘non-essential’ shops and outlets receiving no consumer spend or footfall during the lockdown. For retail businesses that were already struggling before the pandemic, this could very well be a death knell. The knock-on effect for commercial owners is that they could soon be losing a multitude of tenants. Legally, those that let, manage or occupy commercial property must comply with all legislation and any standards set by the Department of Health and Social Care, as well as any coronavirus specific legislation or regulation made by government. With government announcements on the response to the pandemic given daily, the situation can change day to day, so it’s important for commercial property owners to remain on top of current guidance, legislation and measures. As has been witnessed during the lockdown, businesses are being expected to play their part in helping to curb the spread of the virus by taking containment steps. For property owners and managers this could mean shuttering entire sites in accordance with social distancing measures. However, as not all workers and businesses can work from home, many commercial buildings will still be open. In these situations, owners can put other proactive measures in place to help limit possible infections such as providing hand sanitiser at key points in buildings and intensifying cleaning regimes, especially in shared facilities such as kitchens and bathrooms. Of course, it isn’t only property owners suffering as a result of the pandemic, but also occupiers. Depending on how long the crisis lasts, many business tenants will find themselves struggling to pay rent and service their debts which, in turn, has a knock-on effect that could leave them breaching the terms of their leases. Fortunately, there are government measures in place which may be able to help tenants, but as with all these emergency financial measures, they are by no means a silver bullet or safety blanket. Commercial tenants can take some comfort in the fact that if they are tied into long-term leases – and depending on where they currently are in the lease – they are protected from early termination. As many industrial sectors are at risk, landlords will need to stay abreast of the situation and closely monitor the financial health of their tenant companies. We’ve already touched on retail, but this is one of the most vulnerable sectors during this unprecedented lockdown. Conversely the supermarket grocery sector along with ecommerce giants like Amazon have experienced a massive upsurge in sales and demand for their delivery services. They’ve even needed to draft in thousands of new workers to cope with the strain. Financial health will understandably be different from sector to sector, making it doubly important for landlords to pay attention. Although they are each experiencing a different set of circumstances and concerns stemming from the coronavirus pandemic, both commercial owners and occupiers are similarly suffering because of the outbreak. Faced with uncertainty, they’re both having to adopt a ‘wait and see’ outlook in hopes that the crisis will begin to ease and certainty will return to the market. 18 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk COMMERCIAL PROPERTY © Shutterstock /romakoma 16-19.qxp_Layout 1 02/04/2020 14:15 Page 3NOW ON 24th February 2021 A well targeted event aimed at the Construction, Property, Business, Investment, Finance, Professional Services and related B2B markets. It has everything you require for a great day of networking and business generation. Face2face route2market – the opportunity to meet more potential clients in one amazing cost effective day, than it would take months out on the road. As the exhibition closes (circa 2pm), we will roll directly into an informal network lunch, with paybar – tickets are just £25 plus vat and can be ordered and paid for directly online. For further Information contact tina@businessshowsgroup.co.uk Register now businessshowsgroup.co.uk NOW ON 24th February 2021 The Bentley Hotel, Newark Rd, South Hykeham, Lincoln LN6 9NH Exhibition & Network - Property & Construction related industries - FREE TO ATTEND 16-19.qxp_Layout 1 02/04/2020 14:15 Page 4Next >