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10th February 2008
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59,945 Posts
Discussion Starter · #1 ·
Now I don't want you to feel sorry for these 'greedy' property developers, but I think it's only fair that we should feel their sense of pain. Sadly there will also be more worthy people hit by the credit crunch.

From Crains.

Developers feel pain as crunch hurts
Hurstwood settles £100,000 claim while Artisan and Ask cut jobs in face of downturn
By Simon Binns


Another week, more signs of strain among property developers and construction firms caught in the credit crunch.

Stephen Ashworth, the owner of Bolton-based property development group Hurstwood, is battling to contain problems caused by the collapse of the group's construction arm.

Hurstwood blamed problems at B&R Developments' Howard Town Mill scheme in Glossop as a factor in its construction arm going into administration.

Now subcontractors on the project have said they are preparing claims against another group company, Hurstwood Developments.

Duncan Munro of Esmanco Engineering, said he is owed more than £100,000 for work on the scheme which was being run by Hurstwood Construction until it went into administration last week.

Munro insists that letterheads, company numbers and company details on contracts he signed all related to Hurstwood Developments and said he intended to pursue the company for around £120,000 of outstanding monies.

The sum was enough to force him to place his 34 year-old Hadfield-based steelwork business into receivership last week.

Asset-rich


Ashworth told Crain's on Friday he had just settled a six-figure claim issued against Hurstwood Developments by Manchester-based architect Buttress Fuller Allsop Williams.

He said he expected subcontractors to “have a pop” at other parts of the Hurstwood business which were more asset-rich but said that ultimately the liabilities for the scheme lay with Hurstwood Construction.

He added that the rest of the business remained sound and described main funder Royal Bank of Scotland, with whom a £24m package was agreed last year, as “wonderful”. He said the group “hadn't breached one banking covenant” and added that all five of its main lenders were not only supportive but also “looking at new business”.

B&R Developments, meanwhile, said the blame for Hurstwood Construction's demise could not be attributed to its project.

A spokesman said that it had offered the contractor “a substantial ex-gratia payment of £381,000 over and above Hurstwood' s entitlement” just to get the scheme finished.

Ashworth said that conditions attached made the offer “inequitable”.

Elsewhere in the property sector, other companies are feeling the strain. Manchester-based Artisan Property Group has parted company with deputy chief executive Jason Millett and his brother, Peter Millett, who was construction director.

Jason Millett's personal assistant, Jane Wright, has also left the company. The departures follow the resignation of finance director Paul Deehan at the beginning of June.

In a statement, the company said founder Carol Ainscow had taken steps to “reshape Artisan Property Group for the current economic climate”.

The company is closing down its construction business and will now use outside contractors.

Ainscow's statement added: “Several senior management posts have been axed in recent weeks with no plans to reinstate them in the foreseeable future.

Turnaround



“The current slowdown in the industry has not surprised me, but I firmly believe there will be a turnaround soon. However, major construction experience and practices are not appropriate.

“We are currently looking closely at the use of agency workers and sub-contractors. Artisan needs to become a tighter operation.”

According to people familiar with the situation, Barratt Homes has pulled out of its BASE partnership with Artisan, which was due to build almost 3,000 affordable homes in West Gorton and Hattersley.

The Manchester office of Rok Developments has also seen staff cuts, losing all but managing director Stuart Longbottom and one other. The company had employed around 10 people until late last year.

“The development arm does still have a future,” said Longbottom. “But we have had to let staff go.” The developer has failed to attract any tenants to its Wilmslow Office Park scheme.

Dandara has made around ten redundancies since the end of last year, blaming the difficulty for buyers in obtaining mortgages.

David McLean Homes is also set to close its North West office in Runcorn and move regional operations back to its head office in Deeside, Flintshire.

Several sources close to Ask Developments said the company has made a handful of redundancies in its residential division.

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Slump fills auction houses with bargains
By James Chapelard


Property auctioneers are being hammered by the buy-to-let slump but those specialising in insolvency work are taking on new staff and more space to cope with an increasing volume of bankrupt stock passing through their sales rooms.

In particular they report a surge in the number of clothes retailers and double glazing firms going out of business.

Peter Davies, senior director at Stockport-based auctioneers and valuers Philip Davies & Sons is taking on new staff to cope with the extra business.

So far he says he has seen small to medium businesses go under but anticipates larger companies will soon be in trouble. He said: “We are very busy at the moment but we have not got any high profile stuff for now. It is all smaller businesses. We are numerically up on last year. Our turnover will go up.

“We anticipate that we will be busy in the next 12 months to two years. We are buoyant. We work in a reverse economy. When times are bad we are busier.”

Extra staff


Robson Kay, the Baguley-based valuers and auctioneers, anticipate that turnover will be up by at least 30 per cent on 2007. The firm is expected to take on five extra staff in the coming months to cope. Director Jonathan Kay said he had sold repossessed assets from opticians, clothes shops, double glazing firms and restaurants in recent months.

He added: “We are extremely busy. We are looking for more valuers to work for us to cope with the volume of work. In 2007 we took 340 instructions. So far we have had 215 this year. By the end of 2008 we should be in the region of 500.”

Although Kay said the firm was making more fees from the increased volumes it was harder to maximise returns for clients because assets were worth less compared to last year. He said to increase returns he was having to go further afield to get higher prices.

He added: “We have to look at buyers in other countries where they are not as badly hit. We will get more for sewing machines abroad, for example.”

David Goodman, of Miles Platting-based furniture auctioneers Ian Michael, said he was getting more surplus items direct from furniture retailers because they are fearful of being left with too much stock. But the number of customer returns was down because sales are lower.

He said: “The number wanting to buy at auction does not increase as the economy gets worse. We are turning the same amount of stock but prices are lower.

“There is not a massive increase in business. You need an end user. The money is not there if you are a retailer or customer.”

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Housing market shows lack of movement
Removals firms look to office and storage companies to provide work as demand drops
By James Chapelard


The sluggish state of the housing market is taking its toll on removal firms in Greater Manchester, who estimate that demand has nearly halved since this time last year.

Many are offering cut price deals in the face of hot competition for fewer and fewer house moves.

The industry is suffering so much from drying demand that some firms have had to lay off staff or put workers on part-time contracts.

The sector, which is highly fragmented with many small firms and national operators, is usually at its busiest in the run up to summer but firms are reporting a drop in business of 40 to 50 per cent compared to 2007.

David Garlick, director of family-owned Stockport firm A Houghton, said he had considered laying off staff. “This year we have seen a downturn in house moves, so I am going to see if I can get back into office and factory clearance.

“It is very difficult. Prices have come down by about 10 per cent. People are saying to customers ring me back and we will see if we can beat the quote.”

Chris Fleming, from Warrington-based Chris Fleming Removals, said companies were fighting for every scrap of business. He said: “We are quiet. We have had to put permanent staff on part-time. There are lots of removal companies out there and they are tendering for fewer jobs. Some companies are operating under cost.

“They are losing money on some jobs just to win the business. We are down 50 per cent.”

Mike Brown from Sale-based MBT Removals said he had carried out 70 per cent fewer estimates compared to May 2007.

He said: “It's pretty dire. There are men out of work. If you are not getting the phone calls you don't get the work.”

Trafford Park-based Britannia Bradshaw has posted a notice on its website offering a 20 per cent discount on removals carried out in June. It says this is “due to the current UK housing market”.

Figures from the Land Registry on house sales in Greater Manchester make grim reading for removal firms. In June 2007 almost 6,000 homes were sold compared to just 2,884 in February 2008, the latest figures available.

Housebuilder Bellway said this week it expects to sell 10 to 15 per cent fewer homes in the year to July, with the sales in the North of England the worst hit. The company said net reservations since the beginning of February were 31 per cent lower than last year.

Mortgage approvals in April fell to the lowest level in nine years and house prices fell 2.5 per cent. Analysts at UBS are predicting a house price fall of 15 to 20 per cent.

Paul Swindon from the British Association of Removers said members were sustaining themselves by concentrating on storage and office removals but he admitted the sector was facing a tough time.

He said: “We hope it is turning a corner. Many of our members get involved in storage. That is sustaining them through this period to make sure businesses keep operating.”
 

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It's a nice development is that one. As a former resident of Glossop I have watched it grow over the last year or two, just hope it reaches its conclusion.
 

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Hmm...

Got a Dandara update e-mail:

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10th February 2008
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59,945 Posts
Discussion Starter · #7 ·
From Crains.

Property market slump sparks layoffs at Savills
By Simon Binns


Residential property agent Savills has made around 15 people redundant from its Manchester office as part of a national job-shedding exercise prompted by the property market slowdown, according to one of those affected.

The London Stock Exchange-listed company gave some staff only a few days notice that they were no longer needed.

One Savills employee, who asked to remain unidentified, told Crain's that cuts had been made in the firm's land development, residential and new homes divisions.

“If there are no new homes, you don't need a new homes department,” the source said. “Around 15 have gone from this office and it looks like there might be more before the end of the year. It was a real shock to me and I'm not really sure what I'm going to do next. It's unlikely I'll be looking to stay in the property sector though.”

The company employs around 135 people at its Manchester city centre office on Fountain Street.

Some of the redundancies have affected experienced staff who have been there longer than the minimum two years required to qualify for any redundancy entitlement. Current redundancy pay at Savills is £230 for every year of service at the company after an initial two years. One staff member made redundant is understood to have been there for almost 10 years, but has left with only around £2,000.

“People are feeling very let down,” said the source. “And there are no other jobs in similar positions as it seems to be affecting everyone.”

The Savills employee said that staff had been made aware redundancies would be made a few weeks ago, and letters had been circulated to those possibly affected.

Several sources in the Manchester property industry said they knew of the redundancies.

One developer, who did not wish to be quoted by name, said: “It's no great surprise. If you operate residential, new homes and land agency, you are going to be exposed in current conditions.”

Savills refused to comment, and instead referred Crain's to a trading statement issued in May which outlined the “difficult conditions” currently affecting the property sector.
 

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10th February 2008
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59,945 Posts
Discussion Starter · #8 ·
From Crains.

Rochdale threatened by crisis at Barratt
By Claire Shoesmith


More than £600m worth of regeneration projects in Rochdale could be in jeopardy amid fears that the parent group of the town's most active property developer may default on its banking covenants and go into administration.

Wilson Bowden, which is owned by Barratt Developments, won a contract from Rochdale Metropolitan Borough Council earlier this year to carry out a £250m redevelopment of the town centre. In addition, the company is developing the nearby £350m Kingsway Business Park.

Together the two projects are expected to rejuvenate the entire industrial, office and retail landscape of the town.

However, Barratt Developments, which bought Wilson Bowden for £2.2bn last year and has recently put the business back up for sale, has seen its share price plummet by more than 94 per cent in recent weeks, prompting concerns about the health of its balance sheet. The combined value of the two companies is now just £250m.

The declines in the share price were also exacerbated last week when Dresdner Kleinwort issued a research note advising investors to steer clear of Barratt stock, saying that the group's debt levels may be much worse than the market expects and that it may need to raise as much as £1bn to stay in business.

“We believe even at these levels existing shareholders should cut their losses and no-one should consider buying until details of write downs, gearing and any financial restructuring become clear,” Dresdner analyst Alistair Stewart said in the note. He also said that at the current share price — around 70p compared with 455.5p at the start of the year — the company would have to conduct a right issue at a rate that was “possibly unfeasible” to raise the required funds.

Following Stewart's comments, Barratt chief executive Mark Clare tried to reassure the market, saying that the group's level of building activity, debt and anticipated land write downs had not changed since an update to the market last month. Meanwhile a spokeswoman for Wilson Bowden told Crain's: “We remain wholly committed to all our projects and will continue to work closely with each of our development partners to deliver quality schemes synonymous with Wilson Bowden Developments.”

Simon Danczuk, Rochdale's Labour Party parliamentary candidate, said he had long been concerned that all of Rochdale's development was being placed in the hands of one company. “Barratt's poor financial performance gives me real concerns for the future of our town,” he said.

“If Barratt goes under this will affect Wilson Bowden, who they own, and delay the regeneration of our town significantly. I am now seriously worried that Rochdale's regeneration is in jeopardy.”

John Hudson, chief executive of Rochdale Development Agency, said he was monitoring the situation but insisted that it was business as usual at Kingsway. “These are challenging times for the whole of the property sector but we remain confident about Kingsway's ongoing and long-term success.” A spokesman for Kingsway also said the development was progressing as planned, with the official marketing of the first plot due to start next month. Biotech storage group Vindon and manufacturing company Takeuchi are already confirmed as tenants.

Rochdale Metropolitan Borough Council, which awarded the town centre redevelopment contract, declined to comment.

Although it has never confirmed the move officially, Barratt has pulled out of BASE, a joint venture company with Manchester developer Artisan, which was due to build 1,200 affordable homes in east Manchester.

Wilson Bowden is also building Belvedere House, 103,000 sq ft of Grade A office space on Booth Street in Manchester city centre.
 

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10th February 2008
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59,945 Posts
Discussion Starter · #9 ·
From Crains.

Other Views: Dithering is wrecking the housing market


The decision by Persimmon, along with other housebuilders, not to commence work on any new sites will have repercussions, not only across the house building and construction industry, but it will also have a major impact on the wider economy.

Suppliers, contractors, manufacturers and logistics will be hit very hard by the downturn in the housing market. The sharp fall in new home sales will put thousands of jobs at risk across the whole of the economy.

The government has set a very ambitious house building target which requires two million additional dwellings to be built in the next eight years.

We are already a year into this period and over this time house building rates have declined rather than increased. The capacity of the house building industry to deliver this additional number of houses has been questioned by a number of informed sources within the industry and it is widely recognised that there is a skill shortage in both the public and private sectors.

Diverted abroad?


The housebuilders' decision to defer construction and lay off staff today means that it will take time to “gear up” and recommence work on their sites, and it is possible that over the next few months of enforced inactivity the skilled workforce that did exist will be diverted elsewhere, possibly abroad.

The whole supply chain will need to be re-engaged and a period of time will need to be allowed for the market to recover. It will therefore take time for the housing numbers to recover and if the thrust is to deliver more family housing and fewer apartments, then site densities will fall, and lower unit numbers will be produced on an annual basis from each housing site, thus reducing further the overall annual totals.

Government need to act quickly and decisively in consultation with the industry by providing an increase in the availability of credit for first time buyers, increasing the threshold on stamp duty and providing the equality into the housing market.

They should also consider reducing the potential financial burden upon the release of sites as this is, in many cases, a combination of the high demands of commuted sums combined with abnormal cost delivery which produces a negative land value for the site owner, who then has no incentive to bring forward that land for development in the short term.

The recent disclosure by the housing minister that the government have no idea how bad the situation could get and, at best, are dithering rather than taking action, does not bode well for the future housing market. Plummeting share prices and more staff lay offs in the house-building sector are shaking it to its very foundations.

The government must take action and do so very quickly, otherwise the decisions taken today will have a severe long term impact upon the UK economy for several years to come.
 

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10th February 2008
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59,945 Posts
Discussion Starter · #10 ·
Wigan residential tower scheme fails to stand up
By Simon Binns


Manchester-based Modus Properties has puts its ambitious Tower Grand residential scheme in Wigan on hold as it waits for confidence to return to the residential property sector.

The 15-storey tower would have overlooked the developer's Grand Arcade shopping centre, which is almost fully-let and has been a success since it opened in March.

However, the residential element of the scheme has now been shelved for at least six months, and may even be offloaded if a suitable offer is made.

Damian Flood, development director at Modus, told Crain's the current market simply couldn't support a scheme such as Tower Grand and that the company may release other sites.

“We've taken the decision to put Tower Grand on hold for six months,” he said. “We're not actively marketing the site for sale, as we still believe it is a good opportunity, but it could be one of the sites we'd consider releasing if a good deal came along.

“It's a shame as it is the bookend to the shopping centre, but we just haven't been able to secure the bulk investor purchases with the market as it is.”

Flood added that Modus had been talking to Wigan Metropolitan Borough Council about potentially moving some of its office functions onto the ground floor of the scheme, but the covers are staying firmly on the project for now.

Shelley Rigby, a sales negotiator at Wigan-based estate agents Borron Shaw, said losing the development would be a shame for the town, although apartments currently on the firm's books were proving hard to sell.

“We have quite a few apartments in Standish that just aren't shifting,” she said. “Tower Grand might have done quite well though, as it would have been something new for the town and would have brought Wigan a bit more up-to-date. I would have liked one myself actually.”

Another Modus site up for grabs could be the 18-acre plot earmarked for the Genesis Business Park in Rochdale. The land has permission for 220,000 sq ft of office and industrial units and Flood said that the company would look to either enter a joint venture on the scheme with another developer or sell the site.

However, the developer, which employs around 100 people, is set to proceed with plans for its 27-storey high Jackson's Row residential scheme in Manchester city centre, on the site of the old Manchester Reform Synagogue.

The proposal includes 180 apartments and planning permission is expected to be submitted within the next month. Flood believes this scheme will be able to make an impact in the slow residential market, as it will be pitched at the high end owner and investor market, as well as corporate customers.

“Of course, we will look to test the market before we start on site, but we think that going for the high end is more viable,” he said.

“Buyers and investors at that level are less affected by the credit crunch, and we have also been getting good demand from corporate clients. Many professional firms prefer to have apartments for staff when they are away on business as opposed to hotel rooms.”
 

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Cowboy of Love
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The Historic Buildings and Conservation Area Panel (that i sit on at t'council) has been meeting for over 30 years.
This months meeting has been cancelled because no applications were entered for consideration.
The first time this has happened apparently.
Make of that what you will.
 

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10th February 2008
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Discussion Starter · #13 ·
The Historic Buildings and Conservation Area Panel (that i sit on at t'council) has been meeting for over 30 years.
This months meeting has been cancelled because no applications were entered for consideration.
The first time this has happened apparently.
Make of that what you will.
Euro 2008?
 

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10th February 2008
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59,945 Posts
Discussion Starter · #15 · (Edited)
Oh to have a spare 100G now. Hold tight for another 3-4 years, watch the market pick up, the opening of Mediacity, the Metrolink extensions and the proposals for Sports City to take place and bingo.

From Crains.

Another residential apartment in Albion Works, Artisan Property's Manchester city centre development on Pollard Street, has taken a dip in value of almost £100,000 at a recent auction sale. Apartment 57 in Block A sold for £98,000 at a Barnard Marcus auction in London on May 21. It had previously sold for £194,250 in April 2005.
 

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Cowboy of Love
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Oh to have a spre 100G now. Hold tight for another 3-4 years, watch the market pick up, the opening of Mediacity, the Metrolink extensions and the proposals for Sports City to take place and bingo.

From Crains.

Another residential apartment in Albion Works, Artisan Property's Manchester city centre development on Pollard Street, has taken a dip in value of almost £100,000 at a recent auction sale. Apartment 57 in Block A sold for £98,000 at a Barnard Marcus auction in London on May 21. It had previously sold for £194,250 in April 2005.
Albion Works is a shit development - thats why its 'taking a dip'.
 

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Cowboy of Love
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In the weekly list of planning application there were three entries this week - and one of those was a resubmission.
 

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Taylor goes as Atisreal cuts Manchester office
24 June 2008, 12:01


Tim Taylor, director of office agency at Atisreal in Manchester, is in consultation over his redundancy as the firm cuts costs in response to the downturn in the market.

Taylor is one of three directors in the Manchester office. The other two, Sara-Jane Preston and Brendan O'Herlihy, both in industrial agency, will remain with the business.

No date has been set for his departure, Taylor said today, adding: "It's part of a global cost-cutting exercise due to the state of the market. There's no point getting bitter and twisted about it."

He added that he had "irons in fires" and hoped to make an announcement on his future soon. Prior to Atisreal he worked for Hartnell Taylor Cook and Jones Lang LaSalle.

Two other members of office agency, a surveyor and graduate, will also remain with Atisreal in Manchester, where the firm employs around 30 people. A national spokeswoman said there were no plans for further redundancies in Manchester.


www.placenorthwest.co.uk
 

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10th February 2008
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Discussion Starter · #20 ·
From Crains.

BIDDER SWOOPS ON CITY LOFT FLATS

An investor has lodged a bid for all 45 unsold apartments in Dock 9 on Salford Quays, part of a residential portfolio which developer City Lofts put into Law of Property Act receivership last week. Andy Finch, a partner at the Manchester office of Knight Frank, said: “That area is really letting well and our client is confident he could rent them out without too many problems.” London-based consultancy Allsop is recovering funds for main lender Bank of Scotland. Allsop partner Jon Gershinson said: “We have no pricing strategy as yet — it's still very early days.” Harrogate-based City Lofts is currently building the nine-storey Milliner's Wharf on Carruthers Street, Ancoats, where Knight Frank sold 82 of the 132 apartments released last June at prices between £150,000 and £260,000
 
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