ISSUE 9 DECEMBER 2017 FGBUR NETT.CO.UK
INSIDE THIS ISSUE Chrysaor Moves In To The Capitol We Are All Local Ambassadors
Business Rates Update
In this edition of Property Matters we feature the logistics park proposals by Titan Investors, Graeme Watt takes a look at the very topical subject of ground leases and there is the usual technical contribution from our building consultancy colleagues. We are delighted to have Phil Kirk, CEO of Chrysaor as our guest contributor. As a result of their acquisition of a package of Shell assets, Chrysaor have significantly increased their presence in the North Sea.
The resultant need for Grade A office accommodation has seen them secure 48,000 sq.ft in The Capitol Building on Aberdeenâ€™s Union Street. We are certain you will enjoy his contribution. We hope you enjoy reading this latest edition and if we can assist you on Commercial Property Matters then please do not hesitate to contact us.
ISSUE 9 DECEMBER 2017
Welcome The publication of this edition of Property Matters arrives on your desk as 2017 draws to a close. Despite the subdued nature of the local economy, there is cause for optimism given the scale of infrastructure projects we will see completed around Aberdeen in the next 12/18 months. This will give a welcome boost to business sentiment in the North of Scotland. In this part of the world we are keen observers of the oil price for obvious reasons. At the beginning of 2017 Brent crude was trading at $59 a barrel, as Property Matters goes to press the price
“OUR GENERAL VIEW IS THAT WE EXPECT TO SEE AN IMPROVEMENT IN ECONOMIC CONDITIONS IN 2018 WITH INCREASED DEMAND FOR QUALITY OFFICES AND INDUSTRIAL PREMISES.” RICHARD NOBLE
is $62 a barrel, the low was $46 a barrel in June. The robustness or otherwise of production agreements between the major global suppliers will, as always, determine price going forward. Our general view is that we expect to see an improvement in economic conditions in 2018 with increased demand for quality offices and industrial premises. Whilst the condition of the local economy has obvious effects on retail activity, the bigger picture impact of online retail will continue to have an effect on bricks and mortar. Retail destinations must continue to offer customers a compelling argument to visit rather than stay at home. This will involve an attractive retailing and leisure experience together with a steady itinerary of events, both sporting and cultural. The major shopping centre owners understand what has to be done, city councils and business improvement districts will require to do the work on behalf of high streets given their multiple ownership structure. TENDER SUCCESS AT FG BURNETT We are always exploring new work streams and I am pleased to confirm that FG Burnett has been appointed as a supplier on the Crown Commercial Services (CCS) Estates Professional Services (EPS) Framework in Scotland. This is the first time CCS has created regional frameworks across the UK for estates services. The new frameworks
“WE ARE ALWAYS EXPLORING NEW WORK STREAMS AND I AM PLEASED TO CONFIRM THAT FG BURNETT HAS BEEN APPOINTED AS A SUPPLIER ON THE CROWN COMMERCIAL SERVICES (CCS) ESTATES PROFESSIONAL SERVICES (EPS) FRAMEWORK IN SCOTLAND.” RICHARD NOBLE
will improve the accessibility of public sector contracts for SME suppliers. Public sector organisations, including local government, health, education and emergency services, will gain an easier route to procuring the services of local commercial property experts. FG Burnett has been awarded a place on the Scotland Regional Lot of the framework following a competitive tender process. Employing local professional services, firms through CCS will help public sector organisations reduce their property overheads, dispose of unwanted assets, and identify opportunities to make savings and generate income from their estate. It also helps speed up the process of securing advisors by avoiding a cumbersome full tendering process. Our Property Management piece this edition illustrates our coverage throughout Scotland. In addition to Management we are active on the retail side in many locations outwith our traditional North Scotland heartland having concluded high street and out of town deals in Glasgow, Dundee, Edinburgh, Stirling, Glenrothes and Arbroath. Our Building Consultancy department has also been active throughout the country and we will be developing this trend going forward. Here’s to a productive 2018! Richard Noble, Managing Director firstname.lastname@example.org
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CHRYSAOR MOVES IN TO THE CAPITOL AS IT BECOMES THE LEADING UK NORTH SEA INDEPENDENT E&P COMPANY Chrysaor, the UK oil & gas independent, has just moved in to four and a half floors (48,000 square feet) at The Capitol Building on Union Street. The office will act as its Operations base and hosts some 200 employees. But what do we know about Chrysaor? THE NAME “CHRYSAOR” IS DERIVED FROM GREEK MYTHOLOGY. Chrysaor was the brother of the winged horse Pegasus and son of Poseidon and the Gorgon Medusa. When Medusa was decapitated by Perseus, both Chrysaor and Pegasus were born at the same time. Little is known about Chrysaor; he was considered a stout-hearted warrior, and his name means “he who bears a golden sword”. Phil Kirk, CEO of Chrysaor, was intrigued by the story and adopted the name for the company in 2007. WHAT DO WE KNOW ABOUT CHRYSAOR THE COMPANY? Chrysaor is a private company established in 2007 and focused on generating superior equity returns by developing and commercialising oil and gas incremental resources. The management team has a proven track record of success and seeks to acquire producing fields with associated undeveloped hydrocarbon resources. Chrysaor is now a self-sustaining full cycle E&P company, with a portfolio of assets balancing near term development with production growth, combined with significant gearing to appraisal and exploration success. WE’VE SEEN CHRYSAOR IN THE NEWS REGARDING A MAJOR ACQUISITION FROM SHELL – WHAT’S THIS ALL ABOUT? On November 1 Chrysaor confirmed the completion of the acquisition of a package of assets in the UK North Sea from Shell for a price of $3.0 billion, subject to customary adjustments. Future payments may be made between the two companies, contingent upon exploration results and commodity prices. Harbour Energy, an energy
investment vehicle managed by EIG Global Energy Partners is Chrysaor’s principal equity backer. CHRYSAOR’S INTERESTS INCLUDE ASSETS OPERATE BY THEM AND ASSETS OPERATED BY OTHERS The package consists of interests in Beryl, Bressay, Buzzard, Elgin-Franklin, Erskine, Everest, the Greater Armada cluster, J Block, Lomond and Schiehallion. Chrysaor is now operator of the Armada, Lomond and Everest hubs. CHRYSAOR BECOMES THE LEADING INDEPENDENT OIL & GAS COMPANY The transaction sees Chrysaor become the leading independent oil & gas company focused on the UK North Sea. Production from the acquired assets is forecast to average just under 120,000 net barrels of oil equivalent for 2017, with current unit operating costs running at less than $15 a barrel. At the time of the completion Phil Kirk, Chief Executive of Chrysaor, said: “With the acquisition of this package of high quality, low cost production assets Chrysaor becomes the leading independent in the UK North Sea. We are grateful to Shell for collaborating with our team to ensure a smooth and safe transition. I am excited at the prospect of our highly professional existing and new staff working together with our new licence and supply chain partners to develop and grow the company together. Safe and efficient operation of the assets is our primary objective as we pursue our development plans. We are already working hard to mature drilling
opportunities in the Chrysaor-operated assets, secure further third party business for the hub assets, and actively support viable development initiatives proposed by our partner-operated assets.” CHRYSAOR – A COMPANY GEOGRAPHICALLY SPREAD BETWEEN THE CAPITOL BUILDING, LONDON AND OFFSHORE INSTALLATIONS The company now has some 400 employees, with approximately 200 based in its operations centre at The Capitol Building in Aberdeen, 150 working offshore and 50 at its corporate headquarters in London. PHIL KIRK, CEO, ON THE OFFICE MOVE Phil Kirk, Chief Executive Officer, said: “At the time of the transaction in January I promised to secure a prime property for Chrysaor’s North Sea Operations. I am delighted that we have proceeded with a landmark location with high quality office space for employees joining Chrysaor. Our move to The Capitol is a positive step for Union Street and the wider Aberdeen area. The increased footfall on Union Street will bring increased opportunities to businesses within the West End and strengthen regeneration within the area.” Phil Kirk, CEO of Chrysaor
WWW.CHRYSAOR.COM FGBUR NETT.CO.UK
ISSUE 9 DECEMBER 2017
higher than The Statue of Liberty. They understand the cyclical nature of oil and gas and know that it will be a vital part of the energy mix for decades to come. They understand why Total, Ineos, Chrysaor, Delek, Ancala Midstream and Worley Parsons have all been involved in major UKCS corporate acquisitions in 2017.
WE ARE ALL LOCAL AMBASSADORS A familiar theme I know, but an important one. At FG Burnett we are involved in many major property projects in our area and indeed throughout Scotland, but these thoughts are about Aberdeen and the North-East. My hometown, a wonderful part of the world and an area that I love - golf at Cruden Bay, climbing Lochnagar on the longest day, eating fish and chips whilst watching the dolphins at Stonehaven, walking the dogs along the banks of the Dee, seeing the Northern Lights, a few local beers or gins here and there, some brilliant meals and nights out with work colleagues and pals. I watched a group of clients enjoy a private tour of one of our client’s
distilleries - what an amazing story - an historical family business, craftsmanship, provenance and a world class product. Just some of the things I have done this year in our area. We can’t be complacent, but we should not be surprised when business and leisure visitors come here and say what a great part of the world it is. In recent weeks I have spent time with US, German, French, Israeli and London investors - they are genuinely complimentary about Aberdeen. They are surprised when I tell them that Statoil have just opened the world’s first floating windfarm offshore from Peterhead - and amazed when I tell them that the turbines are 3 times
A few years ago now, but my sons went to Mile End Primary - we had 47 different nationalities of kids there! That is just brilliant - but the diversity of Aberdeen should not surprise us because we all know that Foresterhill is Europe’s largest single site health campus, that we have 2 excellent Universities and over 30,000 students in the city, that the North East produces over a quarter of Scotland’s food and drink exports and that more than 25 of Scotland’s top 100 businesses are located here. You did know that didn’t you? Or that we are number 1 in Scotland for business start-ups, that Fraserburgh is Europe’s largest shellfish port and that enough oats are grown in North-East Scotland every year to make 700 million servings of porridge. I’ll let you off if you didn’t know about the porridge. I was at a property dinner in Edinburgh recently and we were chatting about familiar themes - politics, the economy, how is Edinburgh doing, how is Aberdeen doing, will the Dons manage to beat Hibs? One of the guests observed that I seemed genuinely proud of Aberdeen and the North-East and I am. Of course, there are significant challenges ahead but let’s not forget what we already have. By Dave MacLeod email@example.com
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This exciting new instruction comes following the acquisition of the former Total headquarters facility on Crawpeel Road, Altens, Aberdeen.
occupation and on flexible terms, the site would no doubt be ideally suited to a logistics/warehousing/transport/ storage operator from within or outwith the oil and gas energy sector.
FG Burnett have been retained by Titan Investors to provide advice on the disposal by lease or sale, and to assist with developing the site masterplan. On behalf of Titan Investors, FG Burnett are delighted to offer as Phase 1, this rare and exceptional opportunity to acquire a significant existing industrial building extending to 6,503 sq.m (70,000 sq.ft) complete with an extensive yard area in excess of 7.5 acres. It is Titan’s intention to lease the facility however, consideration will be given to a sale.
A further 11 acres will be available – delineated in green - as future development land which is earmarked for bespoke build to suit opportunities up to 200,000 sq.ft.
Phase 1 – being the site delineated in red – is available for immediate
The site is the first of its kind aimed directly at the logistics sector taking cognisance of the changing landscape for wider logistics needs within the UK and closer to home at a regional level. Phase 1 Highlights include:-
> Occupying a prominent and easily accessible gateway site to Altens Industrial Estate within three miles of the City Centre and Aberdeen Harbour
> Excellent existing road communication network to be further enhanced by the forthcoming Aberdeen Western Peripheral Route
> Substantial warehousing facilities
and 41,000 sq.ft respectively with various yard options
> High specification building including steel portal frame with insulated clad walls, high bay and fluorescent light fittings, 7m min eaves height and multiple vehicular access doors
> A 10 tonne crane over part, heavy duty racking and ancillary stores and mezzanine
> Extensive and secure yard storage including concrete surfaced forecourts with extensive hardcore surfaced pipe laydown areas
> A total site extending to 3.88 hectares (9.58 acres)
For further information or to arrange a viewing please contact either Graeme Nisbet or Graeme Watt at FG Burnett or alternatively, our joint agents at CBRE. Graeme.Nisbet firstname.lastname@example.org Graeme Watt email@example.com
extending in total to 6,503 sq.m (70,000 sq.ft) but sub-division possible providing 29,000 sq.ft
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I’M NOT SAYING I TOLD YOU SO – OR IN OTHER WORDS “OBLIGATIONS IN GROUND LEASES, TENANTS (STILL) NEED TO BEWARE!!” In 2006, I wrote an article on the sale of industrial estates by Aberdeen City Council and why it should have been a wake-up call for tenants of ground leases who hadn’t been paying enough attention to the terms of their leases or rocketing land values. Way back at that time, the Council had sold a ground rent portfolio of three industrial estates at Altens, West Tullos and East Tullos, covering 59 sites and almost 155 acres. The leases were purchased by a leading real estate investment management company for a price in the tens of millions. Some of these and other portfolios of ground leases have been sold on and are now held by a series of private ground landlords. Fast forward 11 years and some of the points made in that article are once again coming sharply into focus, particularly in response to the downward change in market conditions over the last 2 years.
In summary, the points which continually need to be highlighted and reinforced are:1) Tenants on ground lease sites really must be aware of all the obligations and liabilities in their leases and if not, should seek advice to ensure there are no nasty surprises now or in the future. 2) Ground landlords, or at least their asset managers, will proactively seek to improve the running return on their significant investment and will therefore look to exploit all opportunities to enhance rentals by way of ground rent review, on a proper and reasonable basis it is to be hoped, though this cannot be guaranteed. Any breaches of the obligations in the ground lease by ground tenants may well put them at risk!
3) In particular, ground tenants should always ensure they obtain or have obtained the requisite consent for any internal or external alteration, however small or insignificant, and/or sub-letting “THE WATCHWORD of all or even part of the facility. FOR GROUND TENANTS In the absence of a complete and IS, AS EVER, TAKE ADVICE correct package of documentation, BEFORE COMMITTING the tenant’s negotiating position TO SOMETHING in a ground rent review could WHICH MAY HAVE AN be considerably weakened. ADVERSE EFFECT”
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4) And remember, harsh though it may seem, the reality is ground tenants generally have a full repairing and insuring maintenance obligation. On that premise, it is not outwith the realms of possibility, with one eye on securing leverage for the purpose of prosecuting a ground rent review, that ground landlords will at least review how well (their) property is being “looked after”. The removal or, at least deferral of any threat of being forced
to undertake significant repairs and maintenance works to a building at a time when this is least expected and not budgeted for, may be a strong reason to make a less robust defence to a proposed rent increase. 5) Private sector landlords don’t have to account to the electorate. They only have one agenda which is to enhance value to the satisfaction of their shareholders and policyholders. They are unlikely to be as sympathetic to a tenant’s plight as historically, a public body might have been. 6) Increasing ground rentals have a significant adverse and eroding effect on the capital value of property held by way of a ground lease. Even in tough economic times, ground rent reviews, like rent reviews in the vast majority of other commercial property leases, are upward only. The rents once they have reached a peak never go down! A lot of commercial landlords do subscribe to The Code for Leasing Business Premises and accordingly it is hoped that many will adhere to the intention and spirit of this in their approach to ground rent reviews. However, as the values across the portfolios involved are significant, time will tell. The watchword for ground tenants is, as ever, take advice before committing to something which may have an adverse effect not only on your balance sheet but also, potentially, on your banking covenants as well as those of other occupiers in the wider market. I urge all companies to seek professional representation. By Graeme Watt firstname.lastname@example.org
PROPERTY MANAGEMENT â€œIN FIGURESâ€? Most Northerly Property BUCKIE
Geographical Spread 2 1
We manage 50 Commercial properties for 42 different clients Providing approximately 570,721 sq.ft total business space,
ABERDEEN FG Burnett HQ
Most Westerly Property HELENSBURGH
1. Inverness 2. Banff | 3. Peterhead 4. Inverurie | 5. Westhill 6. Montrose | 7. Dundee 8. Glenrothes | 9. Grangemouth 10. Denny
of which 220, 000sq.ft is multi-let accommodation
1 Primary Healthcare Facility
2 MAJOR BUSINESS PARKS
Providing approximately 26,000 sq.ft of specialised space at the heart of the community Leased to 3 healthcare organisations and 1 pharmacy tenant
Most Southerly Property LONDON
We manage 35 Residential Developments, comprising of approximately 2,540 individual units (apartments, townhouses & houses)
94 S RE AC under our management with a total area of
Over the last year we have raised 1,272 work orders for repairs and maintenance to be carried out across the managed portfolio
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BUILDING CONSULTANCY – WHAT WE SEE THAT OTHERS MAY NOT
The wide range of services provided by our Building Consultancy team means no day is ever the same for our Building Surveyors. However, irrespective of the vast difference in property type, location and services being provided, there are a number of common defects that often make an appearance during surveys. FAÇADE REPAIRS Damage to the façade of traditional buildings is common and presents itself in a variety of forms. In this example, widespread defects were discovered to the envelope of a listed building constructed in brick (unusual for North-East Scotland). Upon inspection it was found that several problems existed i.e. - Missing/eroded pointing - Overly cementitious pointing - Spalling brickwork - Loose/dangerous sections of brickwork The repair methodology consisted of a mixture of hacking out and turning (thus exposing an undamaged face) with some being repaired in a
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specialist epoxy mortar. The repair method was discussed with the Local Authority and Historic Scotland. COMPOSITE STEEL CLADDING The use of composite steel cladding in the construction industry has gradually become more popular across all sectors, the most common defect found remains what is known as end lap corrosion (or cut edge corrosion). This defect, along with widespread historic repairs to the fixings were identified in this instance. Whilst it is common for end lap corrosion to be treated by simply undertaking a specialist repair locally, the additional defects identified on this occasion meant that the best course of action to alleviate all water ingress issues would be to over sheet both the roof and gutters to provide a new properly detailed waterproof membrane which carries an insurance backed guarantee. TRADITIONAL SLATE ROOFS Damage to traditional slate roofs often presents itself by way of broken, cracked or missing slates, as well as damaged leadwork or pointing. On this occasion, it was evident that the traditional style utilised was not suited to its modern day use. The slating pattern known as
‘open slating’ was traditionally used in outhouses where ventilation was required. In this case, the main premises had previously been extended to utilise the former outhouse without understanding the issues which would be created by lining the internal surfaces of the roof. Unfortunately, the only solution will be to strip and re-slate the roof. CONCRETE DEFECTS Concrete is often considered to be a long lasting, robust material that is unlikely to perish. Unfortunately this is not the case as it is prone to cracking, spalling and delamination. Commonly, such defects can lead to corrosion of the steel reinforcement bars within the concrete. In many cases this can cause the surrounding concrete to spall and delaminate. These issues not only affect the structural integrity and longevity of the property/structure but can also have some serious health and safety implications. Proper repairs undertaken by a specialist will prevent further deterioration, preserving the structure against future defects. By Jim Johnstone email@example.com
BUSINESS RATES UPDATE – BARCLAY REPORT AND SCOTTISH GOVERNMENT RESPONSE The long awaited Barclay Report on Business Rates was finally published on 22nd August 2017.
3) Large Business Supplement to be reduced – this supplement which applies to properties with a rateable value in excess of £51,000 is currently set at 2.6p in Scotland but is only 1.3p in England. 4) A new relief at 100% to be introduced for childcare nurseries which will effectively remove these subjects from business rates and is intended to support childcare provision.
This report, running to some 140 pages and containing 30 individual recommendations on how the rates system in Scotland could be reformed, is the culmination of over a year’s work by a review group under the chairmanship of Kenneth Barclay, former Chair of RBS Scotland and Council member of CBI Scotland. The Group received and considered over 150 submissions prior to issuing their conclusions but, somewhat disappointingly, the recommendations made were severely limited by the remit under which they were appointed which required the review to be revenue neutral overall and precluded making any recommendations regarding the 2017 Revaluation.
5) Expansion of existing Fresh Start Relief scheme which provides relief for new occupiers of certain long term empty properties.
The overriding conclusion reached by the review group is that some form of property tax is still an appropriate way to fund local services provided by councils however, they also acknowledge that a property tax does not adequately deal with all aspects of the growing digital economy. The most significant recommendations emanating from this review are set out below:-
8) Introduction of a general antiavoidance rule to make it harder to exploit loopholes and, in particular, a tightening up of the empty property relief regulations.
1) Rates Revaluations to be undertaken more frequently – every 3 years rather than the current 5 yearly valuations and the gap between the valuation update and the date when the new rateable value (RV) comes into effect to be reduced from 2 years to 12 months. This should reduce the degree of fluctuation in rateable values from one revaluation to the next and also limit the disconnect between valuations and the state of the economy when the new rates became payable. 2) A 12 month delay between construction of a new building or completion of extension/ improvements to an existing property and the new, increased rateable value coming into effect.
6) Better information on rates to be made available to ratepayers and a full list of recipients of rates relief to be published. 7) . Reform of the rating appeal system – one of the stated aims of this reform is to reduce the number of appeals lodged and it is recommended that consideration be given to introducing fees to lodge an appeal which raises major concerns about free access for ratepayers to challenge unfair valuations.
9) Review of amateur sports club relief and also certain charitable reliefs for independent schools and armslength external organisations set up by local authorities for the sole purpose of obtaining rates relief. 10) A limit of 2 years to be placed on the current exemption from empty property rates for listed buildings.
“THE OVERRIDING CONCLUSION REACHED BY THE REVIEW GROUP IS THAT SOME FORM OF PROPERTY TAX IS STILL AN APPROPRIATE WAY TO FUND LOCAL SERVICES” SCOTT STRACHAN
properties and the charging of rates on new build properties. The next business rates revaluation will take place in April 2022 but, thereafter, revaluations will be conducted every 3 years. However, the recommendations regarding a review of sports club and certain charitable reliefs were singled out as requiring further engagement and consideration before outlining a position on implementation. Whilst the Scottish Government proposals remain subject to the agreement of Parliament and, of course, budgetary constraints, it is to be hoped that the implementation of the majority of the Barclay recommendations will take place sooner rather than later. Although Barclay may fall short of the root and branch review of business rates hoped for by many, and with some reservations regarding the proposed reform of the appeal process, it is considered that the proposed changes should result in a fairer and more transparent Scottish rating system. By Scott Strachan firstname.lastname@example.org
Derek Mackay, the Scottish Finance Secretary, responded promptly to this Report with a statement to the Scottish Parliament on 12th September in which he confirmed his intention, subject to any necessary legislative changes and budgetary considerations, to implement the vast majority of the proposals as soon as practicable. The first of the proposed changes will take effect from 1st April 2018 and should include 100% relief for childcare nurseries, expanded Fresh Start Relief, the recommended 12 month delay in implementing increases in rates for extended / refurbished FGBUR NETT.CO.UK
ISSUE 9 DECEMBER 2017
RETAIL PROPERTY FOCUS Another Acquisition for British Red Cross Following on from acquisitions in Alness and Galashiels, FG Burnett are pleased to have secured another unit on lease for British Red Cross. FG Burnett are retained in Scotland in relation to retail acquisitions. In Glenrothes British Red Cross have relocated to a very high profile unit on Unicorn Way, within Kingdom Centre, the town centre for Glenrothes. The unit provides 1943 sq.ft and have taken a lease for 10 years incorporating a tenant only break option after year 5.
A Tale of Two Sectors
“IN GLENROTHES BRITISH RED CROSS HAVE RELOCATED TO A VERY HIGH PROFILE UNIT ON UNICORN WAY, WITHIN KINGDOM CENTRE” RICHARD NOBLE
Richard Noble commented: “Landlords are attracted to the covenant of British Red Cross who carry out an excellent fitout adding vibrancy to the locations where they choose to trade.”
According to the Office of National Statistics online sales have risen to 16% of total retail spend. This is up from 4% 10 years ago. There is no reason to suggest that this will not continue. The UK leads Europe in total online sales volume. This has negative implications for the High Street with retailers requiring less bricks and mortar stores, achieved through reigning in previously planned expansions and not renewing existing leases at expiry. The picture is mixed however, with online activity resulting in increased demand in the warehouse/ logistics sector which has struggled to keep up with occupier requirements particularly in the South East of England. Rents in this sector are increasing and investor demand has been strong throughout 2017.
Letting in Glasgow’s West End Acting for Aberdeen based investors McKay Spaces Ltd, FG Burnett provided advice on the letting of 20-2 Great Western Road, St. George’s Cross, Glasgow to the Edinburgh based Time and Tide. The St George’s Cross store will be their seventh store adding to their other Glasgow, Edinburgh, Peebles and Berwick furniture and home designs shops. David Henderson who acted on behalf of the
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Landlord said, “The prominence and location of the property lent itself to securing a good quality home furnishings retailer and I am delighted to have been involved in the letting to Time and Tide and wish them all future success.”
“THE PROMINENCE AND LOCATION OF THE PROPERTY LENT ITSELF TO SECURING A GOOD QUALITY HOME FURNISHINGS RETAILER” DAVID HENDERSON
RETAIL PROPERTY FOCUS Food-To-Go We see them every day whether it is on high streets, in shopping centres, railway stations, roadsides, airports and petrol station forecourts. The popularity of food-to-go (FTG) has never been greater, showing stronger growth than both the eating out market and foodstore market over the last few years. The three pillars of FTG – tasty, good value and convenient, no longer cut it for the hard working, tech savvy customer. Now it needs to be fresher, hotter, faster and healthier too. The business model has attracted huge interest from investors seeing growth potential in brands such as Leon and Vital Ingredient. According to The Institute of Grocery Distribution (August 2017), the UK’s FTG sector will be worth £23.5bn by 2022, up from £17.4bn in 2017 as shoppers preference for eating on the move shows no signs of slowing down. The rise in the popularity of FTG is generally attributed to the busier consumer. Consumers work and commute longer hours with shorter lunch breaks so have less time for food consumption. The average consumer also has less structured eating patterns and the distinction between meals has blurred, which contributes to the FTG sector. Little and often appears to be replacing the traditional three square meals, which has expanded the market further. Operators such as Pret A Manger, Greggs and Subway are seeking ways to expand, so the growth potential of this dynamic and rapidly shifting sector represents a clear opportunity for Landlords and Developers. The continued growth of ‘coffee culture’ from the likes of Starbucks, Costa, Café Nero and UK newcomer Tim Hortons has fuelled performance from the FTG segment. With its origins in Canada, Tim Hortons picked Glasgow’s Argyle Street for its first European store and have plans to continue opening further operations
across Scotland and the UK. The coffee specialists as a whole are responding to the FTG sector by focusing more on the food and improved lunchtime options. FG Burnett have recently been involved in a number of lettings within the FTG sector. German bakery brand trading in the UK as baked2TAKE have added to their existing operations opening their first Scottish outlet in Aberdeen. The fully self-service bakery and coffee shop has taken a 10 year lease at 253 Union Street. FG Burnett acted on behalf of local investor Craigellen Assets Ltd in negotiating the lease for the 3,700 sq. ft unit. Welcoming this new addition, FG Burnett’s David Henderson added that he expected baked2TAKE to trade well given the demand in this sector combined with added footfall at the West End of Union Street with the increasing uptake in city centre Grade A office accommodation. Baked2Take Aberdeen operator Gillian Cooper added: “Our aim is to sell the highest quality product at the best prices in a friendly environment. We will source food locally where possible and produce food with an emphasis on freshness. Our range of products will cater for take-away, sit-in and business customers and will include freshly prepared sandwiches, baquettes, soups, salads, pastries, beverages and ice cream. Our coffee is provided by the National Coffee Company and is a fantastic blend of bean to cup product.”
FTSE 250 company Greggs one of the UK’s leading FTG retailers with over 1,800 shops nationwide and with ambitions to grow a further 2,000 shops nationwide having recently agreed deals on 2 units in Aberdeen and Westhill adding to their existing North East representation. Acting for CBRE Global Investors UK Limited, FG Burnett has let a 2,000 sq.ft unit on Aberdeen’s Wellington Road to Greggs, adding to the existing occupiers at Wellington Trade and Retail Park. FG Burnett have acted on behalf of Orchard Street Investment Management LLP securing Greggs for a 1,800 sq.ft unit at Westhill Shopping Centre adding to the existing mix of retailers who include Marks & Spencer, Costa, Home Bargains, Specsavers and Lloyds Pharmacy. Richard Noble and David Henderson acted on behalf of the Landlords, brokering both Greggs deals. With Greggs looking at expansion nationally, we were delighted to offer them a quality location on a main arterial roadside scheme and also a high profile unit within a successful suburban shopping centre. Richard Noble email@example.com 01224 597528 David Henderson firstname.lastname@example.org 01224 597538
GET IN TOUCH We hope you enjoyed the latest edition of Property Matters and would love to hear your thoughts or suggestions for future articles. At FG Burnett we are passionate about sharing our knowledge and are always keen to learn more, so if you would be interested in joining our business to business knowledge sharing CPD programme then please contact Karen Ross - email@example.com
ISSUE 9 DECEMBER 2017
CSR 2017 SUMMARY
FG Burnett is delighted to welcome Holly Wyatt to the team.
We have been proud to support Marie Curie (UK) as our corporate nominated charity for 2017.
Holly joins us as a Property Manager within our Property Management team having previously worked for property companies in both Aberdeen and Edinburgh. Holly will be responsible for a wide and diverse range of assets across both the commercial and residential sectors. Welcome Holly!
The majority of funds raised came from an inter-company PĂŠtanque Tournament at the end of the summer. In addition to this, our team were involved in various fundraising activities in the local area. We would like to thank everyone for their support and generosity over the course of the year.
â€˜TIS THE SEASON TO BE JOLLY! The team at FG Burnett would like to take the opportunity to wish you all a
Merry Christmas and a Happy, Healthy & Prosperous New Year! We look forward to working with you in 2018!
33 Albyn Place Aberdeen AB10 1YL
T. +44 (0) 1224 572661 E. firstname.lastname@example.org