< PreviousCOMMERCIAL PROPERTYEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk20The Bricks2015 AwardsEveningTickets for East Midlands Business Link’s commercialproperty awards evening, The Bricks 2015, are now onsale.The Bricks 2015 Awards evening, the perfect chance for landlords,developers, tenants and agents to network, will be at held at the stunningDerby offices of Smith Cooper, from 5.30pm until 8pm. Tickets for theevening are now available, but are strictly limited, so don’t miss out.Our speaker for the evening will be Neil Malik, director at Gleeds. Based inNottingham, Neil overseas the Gleeds national facilities managementbusiness and sits on its Midlands Management Board. He has a great deal ofexperience in both construction and asset management and will be able toshare an industry perspective taking into consideration the whole propertylifecycle.The Bricks are East Midlands Business Link’s annual awards set to honourthe real stars of the region’s commercial property sector. Our awards will drilldown into what is really happening the world of commercial property - fromoffices, industrial and residential, through to community projects such asleisure schemes and schools.The winners of The Bricks will be crowned at a special commercialproperty awards and networking evening at the Derby offices of SmithCooper at St Helens House, King Street, Derby DE1 3EE on the evening ofThursday 4th June.Our awards will include the entire East Midlands commercial propertycommunity, in Burton-on-Trent, Derby, Leicester, Lincoln, Northampton,Nottingham and Mansfield and honour those familiar - and not-so-familiar -industry experts. Who is creating the landscape for the next generation? Ourawards will find out. And we’ll also take a sideways glance at some of themore off-the-wall deals and schemes from around the East Midlands. Thecommercial property sector is fresh and fun - our awards will reflect that.Category Sponsors:Most activeagentBest up andcoming agentSustainable development of the yearResidentialscheme of theyearDeveloper of the yearDeal of the yearExcellence indesignYoung property professionalof the yearThe drinks receptionCOMMERCIAL PROPERTYwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 21SMEs facepropertychallenge in 2015We are seeing a marked increase in the number ofproperty requirements from SME businesses right across theregion. The challenge in 2015 is undoubtedly (a wellreported) lack of availability across all size ranges and gradesof stock. This is due to the combined effect of low levels of newdevelopment since the economic downturn and generallystrong/improving levels of take up. The economic outlook for2015 is generally good; interest rates are set to remain low,wage growth is higher than inflation and falling oil pricesappear to be impacting positively. Whilst there arechallenges, this is clearly translating into renewed businessconfidence and thus impacting positively on the commercialproperty sector. In Derby, activity during 2014 was dominated bytransactions on poorer quality second-hand space, whichaccounted for 81% of total take up. We calculated that“Grade A” space accounted for only 17% of total availabilityat the end of 2014.From a wider economic perspective, RBS recentlyannounced its annual growth figures on a regional and citylevel and the East Midlands had a strong 2014 – the thirdbest performing region in the UK after London and the NorthWest, showing strong growth of 3%, above the nationalaverage of 2.85%. This factor could deliver further jobcreation and all of these figures point to a requirement forhigh quality business space. There is undoubtedly investor appetite for the regions.We are speaking with a number of developers and investorsactive in the sector and funding is available to deliverschemes that could provide high quality space for SME’s,however, these schemes are often financially unviable(largely due to increasing build costs). The time is right tocapitalise on this trend, with London and the South East‘overheating’ – private and institutional wealth is filteringthrough into the regions where there is perceived valueaway from the overly competitive South East market. SME’s account for a large proportion of our economyand the provision of suitable accommodation for thesecompanies as they expand is vital in aiding our continuedrecovery. SME’s are having to consider new build optionsand these buildings are not deliverable at second-handprices/rents. This lack of supply is impacting on prices andrents achieved on good quality second handaccommodation, which are probably 10 to 15% ahead offigures recorded as recently as nine to 12 months ago. Occupiers unfortunately need to accept that rental andcapital values will need to increase above previouslyrecorded prime levels to aid viability of schemes, which cancater for SME demand. This is certainly the case whenlooking at sub-50,000 sq ft buildings where there has beenlittle new build activity across the region. This dynamic isn’tas much of a concern when catering for ‘big box’ logisticsdemand, where a buoyant investment market has seen anumber of the financial institutions look to the regions forvalue, which significantly aids development viability, alongThe outlook for 2015 is a positive one, but creatingbuilt environment for East Midlands SMEs presentskey challenges for the industry according to InnesEngland’s Stuart Waite.18 ÁCOMMERCIAL PROPERTYEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk22with blue chip covenants and economies of scale reducingbuild costs on a rate per sq ft basis. There is evidence of this in the local market, with globaldeveloper Goodman forming a strategic developmentpartnership with Anglesea Capital that will initially deliver930,000 sq ft of logistics space in 2015, with a 323,895warehouse to be speculatively built in Derby on thesuccessful Derby Commercial Park, with work on site likelyin Q2 2015. This follows a 632,000 sq ft letting, agreed in2013, to Kuehne + Nagel for its Heineken Drinkflow Logisticscontract, on the same site, which saw the buildingcompleted by Goodman in 2014 and subsequently sold to aninstitutional investor. The centre is a centralised stockholdingpoint for brands including Foster’s, Strongbow, Bulmers,Heineken, Kronenbourg 1664 and Desperados. Derby is the home to global giants Rolls-Royce, Toyotaand Bombardier (the ‘big three’), as well as a strong supplychain cluster in advanced engineering. A commonly reportedfigure shows that 12% of Derby’s workforce is employed inhi-tech functions – four times the national average anddouble that of other hi-tech cities Cambridge, Bristol andReading. A third of the East Midlandsengineering/manufacturing workforce is in Derby, with over45,000 employees working in the sector.It’s not just the supply chain to the big three that drivesthe industrial/manufacturing sector in Derby. There are otherinnovative companies which were born and continue toflourish in the city including HUUB Design, situated on SinfinLane, which designs, engineers and sells high performancewetsuits to elite (and not so elite) triathletes, including theBrownlee brothers. Development is largely about managing risk, andundoubtedly supply and demand dynamics are right, interestrates are set to remain low and occupier confidence isimproving, but viability still remains a huge issue,predominantly due to increasing build costs. Constructioncosts continue to rise due to materials and skill shortages. Iam sure there is a longer term solution to this problem butcertainly not one that will lead to a reduction in build costs inthe short term. It may be that we need to see more creative ways offunding such developments, including grant funding and‘soft’ loans through Local Authorities/LEP’s in order to assistwith viability. This is happening in respect of large-scaleprojects such as Infinity Park, providing essentialinfrastructure funding for a project of significant importancefor the city and the region. This will create much neededbusiness space and an environment for hi-tech design andengineering companies to flourish, but more is needed.Profit is not a dirty word. The blue chip companies andsupply chain we want to see in the city need to showprofitability, as do developers, and we need to seespeculative development in order to cater for the current andprojected demand for good quality light industrial/distributionfacilities in order to retain and, indeed, attract these highlysought after businesses to the city and the wider region. COMMERCIAL PROPERTYwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 23Secureyour placenow!East Midlands Business Link, in conjunction withFreeths Initiate Nottingham and Morgan Tucker, is setto hold an exclusive breakfast event that will shine alight on the state of the Nottingham commercialproperty market.Free tickets for The Nottingham Property Summit ,which will take place from 8.30am until 9.30am onThursday 4th June at the office of Freeths inNottingham, are now available.Panelists confirmed so far are Matthew Tucker,managing director of Morgan Tucker, and Jon Smart -partner at Freeths who leads the real estate team.More speakers will be announced over the comingweek.Nottingham is often seen as the commercialproperty capital of the East Midlands, but it also faceschallenges as it looks to attract inward investment. Atour exclusive Nottingham Property Summit, held inconjunction with Freeths Initiate Nottingham andMorgan Tucker, we will investigate the dearth of GradeA office space in the city centre, and ask where thenext tranche of development will come from.Our panel will also ask where next for retail, asconsumers turn from bricks to clicks, and we’ll askwhether the industrial market can continue to powerthe commercial property market ahead. We’ll alsoexamine the city’s secondary stock, and unearthwhether its the landlords of tenants who have theupper hand when it comes to turning vacant spaceinto premises which are occupied, and ask the bigquestion: will we see speculative development inNottingham kick-off over the next 12 months.With plenty of time for audience participation, EastMidlands Business Link’s Nottingham PropertySummit, will ask the big questions, and try andunearth a blueprint for the future of the localcommercial property sector.SponsorsELECTION 2015www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 25Election 2015: the business caseThe upcoming General Election is going to be a hard one to call, with thetwo main parties going into the final week of campaigning neck and neck.But what will the Election mean for local businesses?General elections always causeuncertainty both for consumers andbusinesses, according to KevinBuchanan, managing director, Pall-ExGroup. This, he says, results incompanies delaying investmentdecisions, undermining the next stagesof the economic recovery.He adds: “If we see a change ingovernment in May, and consequently,changes to business policies, economicrecovery will be threatened even more- regardless of whether the policies areright or wrong. I believe a change willcreate a lack of confidence in themarkets, and that will have a knock oneffect to customers, suppliers andinternally within our businesses too.“As a logistics firm, we are reliant ona robust transport infrastructure tooperate our national networksuccessfully, and we need tocompletely review our UK infrastructurepolicies. There has been a woeful lackof public investment for generations,coupled with a poor provision forprivate investment in infrastructureprojects. Also, fuel duty at the levelsthey are at now have suppressedgrowth for years.“If we are looking for positives, Iwould like to see the next governmentprovide greater support for small andmedium sized businesses, byencouraging access to long-termgrowth capital.We also need an overhaul ofbusiness taxes, in particular to simplifycorporation tax and business rates. I’dlike to see more competitive capitalallowances, and we must also ensurethat as a country we maintain ourstatus as a flexible labour market,particularly within the EU.Whichever party takes the lead inMay, it’s imperative to remember thatsmall and medium sized businesses arethe backbone of industry, particularly inthe East Midlands, and they must belistened to.Trevor Shaw, business tax director atthe Leicester office of business andfinancial adviser Grant Thornton, said:“I would hope to see the newly electedgovernment introduce policies aimedparticularly at the UK MSB population -such as the recently announced ‘Helpto Grow’ scheme to develop a ‘UKMittelstand’ - that are indeedcommendable. We believe the UK’sMSB population holds the key tounlocking significant growth across theUK economy, yet more can and shouldbe done to further engender a UKbusiness environment fit for purpose inthe long term.“This includes not only enablingsuperstar high-growth companies toshine, but also recognising the crucialrole played by its oft-overlooked mid-sized businesses which have kept theeconomy ticking in the downturn andare now re-establishing Britain as aninternational business hub. We believethe five areas that should be prioritisedand supported for business growth areexports, regulation and administrativeKevin Buchanan, managingdirector, Pall-Ex GroupTrevor Shaw, business taxdirector, Grant Thornton25ÁELECTION 2015East Midlands Business Link www.eastmidlandsbusinesslink.co.uk26burdens, support in the Regions,access to finance, and skills andtraining.The fastest growing businesses in theEast Midlands have identified findingappropriately skilled workforce to be areal barrier to the future growth anddevelopment of their business. Theapprenticeships schemes are helping,but can be restrictive in developing theright additional skills for the existingworkforce, especially where employeesrequire a broad range of skills to meetcommercial requirements. Thedevelopment of more flexible andsupportive training schemes will begood for both business and localeducational establishments.”“I would like to see an increase in the£1.5m profit level at which a companystarts paying corporation tax up to 15months earlier than it would do belowthis level. This has a major drain onfinance that could in fact be reinvestedin the business to drive furthergrowth.”It may have come under fire fromcertain sections of the propertyindustry, but the Conservative pledgeon Right to Buy, as announced in itsManifesto, has got the thumbs up fromone local property solicitor.Hayley Parfitt, property solicitor atRothera Dowson, said: “As a propertysolicitor, it’s clear that Right to Buy is astrong point for the Conservatives tolead on. It offers a wider selection ofthe community the opportunity tobecome homeowners and will alsomake it easier for many people toobtain a mortgage.“As the housing market remains akey issue for a large number of voters,this promise will be widely welcomed,especially by those struggling to getonto the housing ladder.“However, there may well be somebacklash from social housing tenants asit could result in a reduced level ofproperties available to rent for thosewho cannot afford to buy.”She added: “Of course, it’s hard tospeculate as to how a pledge like thiswould affect the property market beforewe know all of the ins and outs. Thatsaid, any initiative to allow more peopleto buy homes seems likely to pleasevoters and grab plenty of headlinesduring the election.”Meanwhile, the Tory promises onpersonal wealth have been welcomedby business leaders in the EastMidlands.Martin Burnett, director at CherryProfessional, says: “The ConservativeManifesto will result in a positiveimpact on take home pay with plans toincrease the tax free personalallowance to £12,500 and an increasein the level at which people pay the 40ptax rate to £50,000 as well asannouncing no increase in rates onnational insurance or income tax. Thisis good news for the UK workforce andwill result in people having moredisposable income which will drive theeconomy forward.”Philip White, director at Blusource,adds: “They key for business is lowtaxes both on companies andindividuals. The UK is the jobs factoryof Europe creating more jobs than therest of the EU combined. This is drivenby the confidence generated byemployers and consumers with moneyto spend and the more jobs we createthe greater the positive effect on oureconomy of this virtuous circle of jobsand salaries.”Toni Robinson, director of HR & HSservices at Qdos Consulting, says:“David Cameron has pledged toremove income tax for those workerswho are on the National MinimumWage. The Prime Minister announcedthat “it means we can proudly say thisis the party of the working people.Notjust the party of low income tax, but us,the party of no income tax.“I believe this will certainly assistthose workers that are currently beingpaid the National Minimum Wage. InFebruary, we saw David Cameronaddress the British Chamber ofCommerce Annual Conference sayingthat ‘Britain deserves a pay rise’; withemployers facing ever increasing costs,and for many auto-enrolment still tocome, this could go some way inreducing the burden of additional payincreases for workers.”Hayley Parfitt, property solicitor,Rothera DowsonToni Robinson, director of HR &HS services, Qdos ConsultingPhilip White, director, BlusourceELECTION 2015www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 27been seen to increase the rise in sitessuch as Facebook and Twitter.5. Push the Apprenticeship agenda:There has been much lip-service paid toapprenticeships by the Coalitiongovernment, and with some success. Butthere needs to be an immediatenationwide push to increase themomentum already gained and offeryoung people an easy, enjoyable way intowork. Apprenticeships are vitallyimportant in two ways; firstly they helpgrowing businesses show that they areserious about supporting the workforce ofthe future; and secondly, from anemployees’ point of view, they can offer away into industries that are sometimessealed off from younger people. How canany new government help swathes ofyoung people into a sustainable,rewarding apprenticeship? Simple: theyshould be offering significant tax breaksfor those companies which take them on.So there it is. The new government has100 days to convince you, the jobseeker,that it can really make a difference to yourcareer. Use your vote wisely.Any incoming government makes a bigplay about how it will create thousands ofnew jobs, but it was something of asurprise when George Osborne jumpedthe shark during his recent Budgetstatement and aimed for full employmentwithin the next Parliament. A pipedream?Perhaps, but here are five things I thinkthe government - of whatever colour -should be doing.1. Raise the National Minimum Wage:Although the government announced inthe Budget that the National MinimumWage would increase to £6.70 an hour inOctober, why not introduce it straightaway? With more and more firms nowcommitted to the Living Wage, animmediate 20p an hour increase wouldincentivise more people to come offbenefits and get back to work. Althoughthe rise is the biggest in seven years,jobseekers need security in work - andthey don’t want to be made to wait for it.Stick that in your manifesto, and you’reonto a winner.2.Increase the personal allowancethreshold: Another Budget giveaway thatmade the headlines, but behind thebravado, what it actually means is thatthose in work have to wait until April 2016before the amount of money we’reallowed to earn tax-free rises £800 to£10,800. Again - why rush this through inthe first 100 days of the new government?At Staffbay we see every day the amountof people for who work is often theexpensive option. An extra year of theraised personal allowance would surelyaccelerate the number of people comingoff benefits and back into work.3. Provide a financial bridge betweenzero hour contracts and full-time work:Zero hour contracts, often rightly, get abad press. They also provide confusionand financial stress on the 700,000 onthem who are often trapped between a lifeon benefits and zero hours roles. So, howabout the government provides somecash for those who actively want to find afull-time job and leave zero hours behind?A kind of bridging loan, if you will - and,for heaven’s sake, make it a simpleprocess. The often labyrinthine processapplying for tax credits also needssimplifying. We know there are plenty ofpeople out there who would give anythingto get off benefits and start a new life in afull-time job - but simply can’t afford it.4. Encourage jobseekers to marketthemselves better: Some of the advicegiven to jobseekers through officialgovernment channels is hopelessly out ofdate. People don’t just need to know howto write a compelling cover letter. Someof us are old enough to remember HaroldWilson’s ‘White heat of technology’speech to the Labour Party conference in1963 - that’s the sort of attitude thegovernment should be pushing. Peoplelooking for a job these days look online -gone are the days of picking up the localpaper. However, a recent report showedthat less than 40 per cent of graduates aremarketing themselves to recruiters online.This clearly needs to change - shouldn’temployees be changing the way theypromote themselves to employers? Sincelaunching staffbay.com four years ago,we’ve seen a wholesale change in the waythe candidates on our portal promotethemselves. The use of video has becomemore and more popular and many use itas a way of breaking down barriersbetween themselves and any prospectiveemployer even before they’ve applied fora job. Most people looking for a job thesedays look online - gone are the days ofpicking up the local paper. The rise inonline recruitment on social medianetworks such as Twitter, LinkedIn andFacebook cannot be ignored - but dojobseekers know where to look - and,more importantly, how to create a trulyunique online brand with which to hasElection 2015: the employees’ manifestoTony Wilmot, founder of staffbay.com, lays out what he thinks jobseekersshould be demanding from the next government.One of the headline grabbingannouncements in the recent Budget,was the end of the tax return. Certainlyyou might be forgiven for thinking thismight be the case, but the reality is that itprobably will not be. If you complete orare required to complete a tax return,you may well still be required to do so,particularly if your affairs are notstraightforward. The key difference isthat in due course you will no longer berequired or perhaps even able toTAXEast Midlands Business Link www.eastmidlandsbusinesslink.co.uk28Don’t be misled -it may not be theend of the taxreturnOne of the headline grabbing announcements in the recentBudget, was the end of the tax return. Certainly you might beforgiven for thinking this might be the case, but the reality isthat it probably will not be, says Erica Manderfield, taxdirector at Streets Chartered Accountants.complete a paper return, these will bereplaced with a digital online account.This proposal, announced in theBudget, will come into effect for sometaxpayers by early 2016 and for everyoneby 2020. The plan is that the new systemwill apply to both individuals andcompanies.What does it mean for us as taxpayersand more importantly for those peoplewho complete an annual tax self-assessment tax return? Well, we are toldthis will simplify taxes, but we were alsotold that self-assessment would simplifytaxes and all that did was increase thenumber of taxpayers who were requiredto complete a self-assessment return!It will certainly simplify it for HMRCwho will no longer have to process andreview many millions of tax returns -they will merely combine data into oneonline system. However, the system willbe reliant on the information that hasbeen uploaded being correct. As anexample, last year more than 25% ofPAYE tax coding notices were incorrectand without a mechanism to submit atax return we are concerned that manycould end up being worse off.HMRC believe that the ‘digital accountssystem’ will be a positive move for manyTAXwww.eastmidlandsbusinesslink.co.uk East Midlands Business Link 29ever we, as tax advisers, will need to beincreasingly vigilant in checking thedigital information to ensure that it iscorrect and relevant to our clients.As with all ‘simplified’ taxes the devil isin the detail. Whilst you may be forgivenfor thinking that such a move may wellreduce the work of a Tax adviser, there isa growing trend for more people to seektheir advice, especially those withmultiple sources of income, rentalproperties and other investments.Erica Manderfield is a tax directorwith Streets Chartered Accountants,a top 40 UK accountancy firm.Telephone 0845 8800320 or emailinfo@streetsweb.co.uk or visitwww.streetsweb.co.ukbusinesses, particularly sole traders whostruggle with the 31st January deadlinesand payment dates so soon afterChristmas. It should provide tax figuresat a glance, especially with salaryinformation, pension data and bankinterest details being readily available. Itwill also enable tax payments to bemade by standing order or throughoutthe year. However, it is of coursealready possible to submit tax returnsand accounts throughout the tax yearand make payments of tax in advance ofthe 31st January deadline.It is also unclear how the system willwork for businesses and companies.Apparently they will be able toautomatically upload their informationinto their account through theiraccounting software, but of course theiraccount will not be able to work out theentitlement to capital allowances oradditional tax reliefs that may beavailable.What it should do is help thosetaxpayers who are subject to the higherchild tax charge as the informationshould be digitally uploaded and taxcalculated and paid without the need fora formal tax return. Those taxpayers withcomplex affairs we believe will still berequired to complete tax returns formany years to come.There is currently little publishedinformation and we await the finer detail.We are sure this is a positive move incombining the information available in asimplified manner, however more thanSHUTTERSTOCK.COM/RTIMAGES Next >