< PreviousTHE BIG INTERVIEWEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk30Sam Metcalf speaks to Blusource director andexecutive recruitment specialist Bjorn Jonesabout how the jobs market is changing post-recession, whether a skills gap has appearedin the professional services arena, and whatthe outlook for the jobs sector in the EastMidlands is over the next 12 months.Bjorn JonesBlusourceOFFICE MARKETwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 31and a rise in the number of planning applications in suchschemes as Leicester City Council’s Welford Place, and the34,000 sq ft development at Watermead Business Park. FriarGate Square in Derby – the only speculative grade A officebuilding in the region – has had no take up.“There is still a strong demand for good quality office spaceand we have noticed a welcome return to larger agent-ledrequirements,” says Taylor.“Analysis suggests that we will see the continuedrefurbishment of secondary stock across the East Midlands aswell as more speculative development as businesses look toremain in the area but upgrade or expand. It’s lookingpromising for the commercial property sector in the EastMidlands and we are confident that this will continue as we gothrough 2014.”Craig Straw, director at Innes England’s Nottingham officeagrees that, much the same as the rest of the commercialproperty market, the office sector in the region is showingsigns of recovery and the mood is one of cautious optimism. He says: “We are starting to see the return of the long leasefor good quality stock. More and more, ten-year terms arebeing secured for lets. This means much-needed stability forthe market along with a fundamental shift in attitude from theyears of recession. “Whilst there hasn’t been a material change in the availabilityof new Grade A stock within the East Midlands, good qualitysecond-hand stock remains popular. We are beginning to seethe reappearance of speculative refurbishment by landlordswho are feeling more confident that the initial outlay will berepaid with a swift letting as the market takes a turn for thebetter – and landlords are being rewarded for their optimism.This year looks to be a more positive year for the Nottinghamoffice market, says James Keeton, associate director at JLL. Hethinks that 2014 and beyond should see take-up returning toEast Midlands Office Market Pulse for Q4 2013 has revealedthat Nottingham in particular enjoyed a strong year, with a takeup of 132,000 sq ft in Q4, contributing to a record take-up of412,439 sq ft last year.Meanwhile, in Leicester, a busy Q4 saw take up in the cityreach 103,000 sq ft – 68 per cent of which was at out of townoffice developments – while in Derby, large deals such asSynergy Healthcare’s move to Wyvern Business Park (17,400 sqft) and London Road (20,400 sq ft) helped to bring about astable end to the year for the city.Phil Quiggin, director of office agency at LSH in Nottingham,says there has been an increase in the number of professionalbusinesses taking up premises across the region, with a rise inthe number of Grade B buildings refurbishments in Nottingham.However, there was little grade A office space in the city, withno speculative developments planned. Jane Taylor, director of office agency at LSH in Leicester, saidthe lack of grade A premises had resulted in developer interestThe long andwinding roadSpeculative office developments are being considered again in the EastMidlands, pointing to a strengthening of the market across the region,according to a report by national commercial property consultants LambertSmith Hampton (LSH).32 OFFICE MARKETEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk32more normal levels of circa 250,000 sq ftper annum. “We have already seen an active start tothe year with Baker Tilly committing to thecity and taking 12,500 sq ft at the recentlyrefurbished City Gate East and Nurtureoccupying 15,500 sqft at Octavia House onHortons Estates Interchange BusinessPark, J,25, M1. JLL active in both of thesedeals,” says Keeton.He says that Baker Tilly was particularlygood news for the city and the earlyactivity has continued with a number offurther deals now in lawyers hands.However, Keeton says that Nottingham’slack of prime city Grade A space continuesto limit options for occupiers. He adds:“We need to deliver new space if we are toretain and attract key occupiers to our citycentre. The city council has taken the leadon this with the announcement on UnitySquare at MIPIM, showing how the publicand private sector can work together andthe hope is this will be the catalyst forfurther development in the city and moreintuitive ideas, bringing forward muchneeded new build space.”One thing that is hampering the EastMidlands office market, according to theexperts is a significant amount of poorCounting cranesBy Jonathon Seddon, director, NG Chartered SurveyorsNottingham is my home town and it’s somewhere that I have a fierce loyalty towards.However it has to be said that, as a city, we’ve found the last six years of the recessionparticularly tough in respect of the Office Market.Large corporate occupiers need a compelling reason to choose one city over another andNottingham has, in the past, been found wanting as a consequence of the limited availabilityof true “Grade A” office space, poor transport links and a failing retail offer.However, things are changing fast and for the better. Works to the A453 are wellunderway which once completed, will give us a fast route to the motorway. The new railwaystation and its large car park is very impressive and the City Council’s commitment to takingspace in the Unity Square Development to get that coming out of the ground has to belauded as an inspired move. Getting more cranes on the Nottingham skyline has to be a goal.The next big hurdle for Nottingham will be to improve its retail offer, as that’s the lifeblood of any city. Our neighbours in both Derby and Leicesterhave massively improved their retail centres and now it’s Nottingham’s turn to reclaim its position as the East Midlands preferred retail centre. There is no magic bullet that can sort Nottingham out in a stroke, rather there is a collective responsibility on all of us who live and work here, to pulltogether and make positive changes wherever we can, no matter how small, as they all count. OFFICE MARKETwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 33quality and fundamentally dated stock lingering in the officemarket, particularly within our city centres. Straw, however, is optimistic for the future. He says: “Moreand more, though, these buildings are being converted –particularly into student accommodation – which adds to thevibrancy of the city centre. It may well be that, as the marketcontinues to improve, we will see this broadened to otherresidential uses, which will undoubtedly benefit our citycentres.”Keeton agrees that refurbs need to become the norm,adding: “Landlords who have committed to high qualityrefurbishment, such as F&C Reit on Park View House, arebenefitting from the limited stock, putting part under offershortly after completion of the refurbishment and close toagreeing terms on the remainder. Enquiry levels in the cityare presently good, both in terms of size and quality and weare working closely with Invest in Nottingham, through acollaborative approach, to try to secure those where we arein competition with other cities.”So, is the property back on song? It’s too early to getexcited, says Straw – there’s a lot of hard work still to bedone: “I think it is too early to say that the property party is infull swing – the industry is still smarting from a long anduncomfortable period of recession. However, there aretangible signs of a long-awaited recovery. The next stage ofthe cycle to be achieved will be the return of design and buildactivity. This requires rents to be in the region of £18-20 persq ft to support the financial viability combined with a long-term lease commitment. It is encouraging to see that at leastpart of this formula is now in place.” The East Midlands continued to grow in confidence in2013, with investment volumes increasing from £0.32bn in2012 to £1.15bn in 2013.Notable deals last year included the Marks & Spencerregional distribution centre at East Midlands Distribution Parkto Tritax for more than £83 million, and Riverside Retail ParkNorthampton to M&G Real Estate for £70 million.INWARD INVESTMENTEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk34INWARD INVESTMENTwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 35Collaboration'swhat you needThe suited property people have long since left the town of Cannes and it is timefor UK businesses to count the cost of their firms attending MIPIM, the world’slargest property conference. So is it value for money? Gary Church, WillmottDixon’s sales and marketing manager, says it is.MIPIM is a conference like no other. The largestevent of its type in the world, it’s where you seeRussian oligarchs sharing the same seminar room asTurkish government officials, and Braziliandevelopers. It’s where you see the stunning Moscowexhibition room next to London with its three metreby two metre layout of the capital’s landscape withThe Gherkin, the London Eye and The Shard – all inminiature.20,500 delegates from 93 countries, including 4,500investors, gathered in Cannes for a frenetic four daysof business meetings and high-level industry talks. Ataround £1,200 a pop for official MIPIM entry, that’salready more than £20 million just to get into theevent. Around three times that number of people goto Cannes without bothering with officialaccreditation.Some countries and regions spend tens ofthousands of euros on their exhibition stands, theirlavish dinners and some even hire yachts. But dofirms really get value for money from MIPIM?The consensus among many is that MIPIM is amust, a chance to meet those high profile people thatyou wouldn’t have a hope of meeting back in the UK.It’s an opportunity also to make a chance connection.There are a whole host of opportunities to follow upfrom quality meetings with investors at MIPIM. TheLeicester and Leicestershire LEP say they securedaround 100 high quality contacts this year fromMIPIM – while Nottingham and Derby report a goodMIPIM effort and a full list of leads to follow up nowthey are back in the UK.While some the headlines back at home havecriticised UK local authorities to be spending moneyon MIPIM while back at home there is a housing crisisand cash-strapped council budgets, it has to be said:MIPIM is still very important. Let’s just remember that opportunities doabsolutely come from MIPIM – and benefit localareas through investment and ultimately jobs andgrowth. Deals are definitely done at MIPIM – takeNottingham’s agreement with UK Regeneration,which came from a meeting with its chief executiveJackie Sadek and the city council back in 2012. Whilethis year, Derby was named one of the Top 25European cities at MIPIM. It’s all powerful, highprofile stuff which helps put the spotlight on ourregions.Willmott Dixon this year supported several localauthorities – Leicestershire, Nottingham, Derby andCoventry. Together with other private sector firms,we are able to support those local authorities whichneed to be at MIPIM and stand shoulder to shoulderwith other regions throughout the world which arealso on the hunt for developers and investors. The traditional flurry of industry reports that arereleased during MIPIM highlighted that most marketsare in strong recovery mode. Our own feedbackfrom MIPIM this year is that construction andproperty investment is back in business. There was afeel good factor and a real confidence in Cannes in2014 which hasn’t been seen for many years. For us, it was great to see such a united front fromLeicester, Derby and Nottingham. Not only did theyhave exhibition stands directly opposite one another,but the leaders of those three authorities celebrated a‘Three City’ effort. Such collaboration is vital for theEast Midlands.MIPIM may be expensive – but then cities don’thave to spend a fortune, but simply be savvy abouthow they spend it and how they garner private sectorsupport. The message is simple: if you’re not there,then you won’t benefit from the huge opportunitiesthat MIPIM does really bring.FINANCEEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk36Overdrawndirectors’ loanaccounts explainedChartered accountant Carl Elsby of Elsby & Co looks at the implications of thechanges to overdrawn directors’ loan accounts.The directors’ loan account is an important way fordirectors to manage both personal and companyfinances. Basically, a director’s loan is when a directortakes money from the company that isn’t a form ofremuneration, such as a salary or dividend, or anexpenses repayment. Often used as a kind of pot tobalance all entitlements andwithdrawals, if the directortakes out more money thanthey are entitled to, the accountwill become overdrawn andthey may then be liable for taxon the outstanding amount. This practice, whilstlegitimate and quite common,has attracted the attention ofHMRC who seem to haveviewed it as a way of avoidingpaying tax by making untaxedloans rather than payingtaxable dividends. Changes tothe regulations pertaining tooverdrawn accounts werefinalised when the Finance Actbecame law last summer. These rules also apply to anyloans taken out after 20th March 2013.Working the systemPrior to the changes, HMRC levied a tax of 25% of theoverdrawn balance which was refunded when the loanwas repaid. They also allowed a concession: if the DLAbalance was repaid within nine months, the tax didn’tapply. This meant that the loan balance was oftenrepaid by voting a dividend before the nine months wasup. However, loans could then be taken out shortlyafterwards, indicating that the repayment was nevermeant to be permanent – ultimately a kind of teemingand lading exercise, i.e. allocating a payment from oneaccount to another in order to make the books balancefor tax purposes.The changesBy manipulating the nine month deadline in this way,shareholders were able to benefit from what was, ineffect, an interest free loan, with no tax burden. HMRChas picked up to this practice and as of 1st March 2013,if a loan is repaid, but subsequently withdrawn againwithin a month, the repaymentis disregarded, incurring the25% tax rate. This preventsnon-payment of this tax andalso prevents tax that alreadybeen paid being repaid, only tofall due again in the nextaccounting period.Unfortunately, the changesare most likely to impact thehard up company which paysvirtually everything it has in thebank to the directors. As this isoften more than they areentitled to, there is usually anoverdrawn DLA. In the past, wewould have advised using theprofits from the next ninemonths to vote a dividend, butthis now won’t be possiblebecause those profits will already have been taken out.The impact on SMEsWhilst these measures could be seen as anotherunnecessary burden on the small business owner, thereis no avoiding them. As an accountant, the best adviceis to ensure that the company finances in good orderand that all directors have a clear picture of thosefinances. Improving profitability whilst cutting back ondrawings can help. There may also be ways of puttingmoney back into the company through an injection offunds or the introduction of assets.As the new tax year approaches, the net effect ofthese changes and the tax burden that they present isonly just becoming apparent to many SMEs. If in doubt,the best course of action is to consult a qualifiedprofessional who will be able to advise on the best wayforward for you and your company.Unfortunately, thechanges are most likelyto impact the hard upcompany which paysvirtually everything it hasin the bank to thedirectorsFINANCEwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 37Your guide to the pharmaceutical world PharmaBUSINESS INTERNA-The completePharma packageGet one step ahead of your competitors withPharma Business International – your completeguide to this fast-moving, innovative andhighly specialised industry!From the publishers ofFood & Drink International,Pharma Business International is basedaround incisive and authoritative information and opinion from the major players in the industry – you'll wonder how you coped without it!Available to subscribers as a printed magazinePublished online at www.pbiforum.net Distributed at numerous industry exhibitionsFind out more! Call +44 (0)1472 310302 or visitwww.pbiforum.netLet the sunshine inWe may not get too manyopportunities to put theroof down in this countrybut as a nation of carlovers, when the weatherdoes smile favourably,there’s nothing we lovemore. Perhaps it’s therarity of the sun thatdraws us to convertiblecars – that and the factthat we love to feel thefreedom of driving with thetop down. Whatever the reasons, it looks like ourlove affair with convertibles isn’t likely todiminish. In fact, a recent survey ofconvertible drivers resulted in nine outof ten of them saying they’d almostcertainly buy another when the timecame to replace theirs.With that in mind and to celebrate therecent arrival of better weather -hopefully - we bring you the very latestlaunches in luxury convertibles. First up, we have the new BMW 4Series Convertible - the latest entrant toa market segment where BMW hasenjoyed widespread acclaim and greatsuccess over five generations ofpremium Convertibles.The design language introduced withthe 4 Series Coupé is evident in this, thesecond model debut in the series. Theresult is a sporting yet elegant car,whether the top is up or down. It’s analtogether different car from itsstablemate, the 3 series Cabriolet too,as its lower, wider and longer and witha visibly greater sporting intent.Porsche39AUTOLINKwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 39Next >