It says that franchising remains the most popular means of overseas expansion, especially among high street retailers (as opposed to food and retail warehouse operators).

Franchise agreements vary from retailer to retailer (and, indeed, from store to store), but

underlying commonality is that they are low-risk but relatively low-return.

King Sturge says that although the appearance of key international brands (particularly in the luxury goods sector) in high streets and shopping centres around the world generates good headlines and attracts consumer interest, the fact remains that franchises are little more than licensing agreements.

There are instances of retailers buying out their franchisees. These include Inditex of Spain, which includes Zara, Massimo Dutti and Bershka in its portfolio of brands.

One of the few truly global retailers, the company operates both company-owned and franchise stores. In some markets, it has actively bought back its franchise and invested its own money in the local business.

An example of this was Russia, where the company opened six franchise stores in partnership with Finnish department store group Stockmann. In 2006, Inditex bought out its franchisee for a reported €42m, in order to commit its own resources to the venture.

King Sturge says that while the low-risk nature of franchising is likely to remain attractive to internationalising retailers for some time to come, the next stage in the evolution of the European market will hopefully see more high street retailers committing company resources to establishing and operating their own store networks in overseas markets.

The report continues: “The property market also has an increasingly significant role to play in the franchising process. As occupier markets have become more challenging,

landlords and developers are seeking innovative solutions to traditional leasing practices. “The concept of landlords becoming retailers themselves has been touted, although this does invoke a certain sense of fear – property ownership and management require very distinct disciplines from sourcing goods from suppliers and selling them to the public.

“But adopting a franchising system could provide a happy compromise. With the landlord adopting the role of franchisee, this could potentially smooth over any of the traditional owner versus occupier disputes, as well as filling space within schemes

and offering shoppers in that centre a brand that was otherwise lacking.

“The concept is still very much in its infancy, but if it develops, it could prove both an innovative approach and one which acts as a conduit for further international expansion among retailers.”

Quite a few, it would seem.

Then Rubislaw Quarry in Aberdeen, Europe’s largest man-made hole, is on the market and already dozens of offers have flooded in for the historic hole.

There are about 40 bids and the price tag is £30,000.

It is estimated that about six million tones of granite were excavated from the quarry over a period of 200 years.

Just what would you do with a big hole in Aberdeen?

Be careful to avoid the jokes, for a start. Potential plans for the seven-acre site, which is filled with water and is home to a nature reserve, could include turning it into a climbing, diving or water sports base.

Not so daft maybe

In South Africa they have what really is a big hole – at Kimberley, and it claims to be the biggest hole in the world excavated by hand.

Not for fun, of course – it was all about scratching out diamonds.

Now that it’s empty the 42-acre hole has a visitors’ centre and various tourist activities and they are trying to register it as a World Heritage Site.

It’s a money-spinner and tourists are flocking in so, maybe the hole-buyer in Aberdeen is on to a good thing.

Mind you, the outside chance of picking up a wee hidden diamond at Kimberley has much more appeal than picking up a wee bit of granite at Rubislaw.

It will create a new business in the real estate advisory market – a £110 million real estate group which will trade as Drivers Jonas Deloitte.

The merger will lead to one of the largest real estate businesses in Europe, with around 700 partners and staff. In what will be a new model in the real estate advisory market, both sides say the merger will revolutionise how property services are provided.

Drivers Jonas has a strong presence in Scotland and there is no indication yet as to the effect of the merger up in Scotland although I understand that a statement is being prepared on this.

The talk is of expansion, acquisition and hiring but in mergers like this there is always concern about jobs.

The combined real estate group, with annual revenues in excess of £110m, will deliver real estate advisory and transaction expertise to the firm’s clients in all markets and industries. It will also form a critical part of Deloitte’s wider £200m real estate industry team, which specialises in providing professional services to real estate clients.

The deal will see over 650 DJ partners and employees join Deloitte in an innovative move for an accountancy firm. Nick Shepherd, managing partner of Drivers Jonas, will become managing partner of the real estate group will join the Deloitte Executive.

He said: “This is a merger of two premium brands and two top performing teams, each already delivering huge market impact. The merger of our partnership with Deloitte provides a fantastic platform from which to build our advisory and transactions business and further develop our service offering in the capital markets through greater leverage and a more substantial capital base.

“The wider Deloitte business gives unparalleled access to international investors, property companies, sovereign wealth funds and high net worth individuals, who play such a key role in the operation of the capital markets.

“We see huge opportunity in combining Deloitte’s real estate skills and wider business expertise with our full range of property and construction services. No competitor will be able to provide an integrated offer combining real estate knowledge, tax, finance and structuring advice in this way to UK and international investors and occupiers.

“With a real estate offer as comprehensive as any in the market place, and fully integrated to meet the wider business needs of clients, Drivers Jonas Deloitte will be fundamentally different from any other property business. I’m excited to be leading such a talented team in creating a new approach to the real estate market, with the immediate goal to double the size of our business in three years.”

He added: “Now is the perfect time in the cycle to make this change, and we expect to be very busy hiring and acquiring in the short term. We see this as an excellent opportunity for our staff to flourish in the wider dynamic, progressive and forward thinking Deloitte environment. Both practices are committed to their people.

“We are certain that our clients will benefit from the wider palette of professional services and business insight this combination will offer, building on the exceptional quality of service they experience from both DJ and Deloitte. This merger keeps DJ’s name in the market, something both parties wanted to maintain.”

NO SNIFFLES IN LONDON OFFICE MARKET

When the London office market sneezes the UK office market catches a cold – is the belief.

The UK’s office market has certainly caught a cold bordering on the ‘flu but it seems that  the London grade A office market has avoided the sniffles – or, to use another metaphor, it has weathered the economic storm,  which has to be good news all round.

Contrary to predictions made in 2009 by industry commentators, which forecast an Armageddon for the City, Hatfield Philips believes that, in terms of specific markets, and within the context of Europe and the rest of the world, the financial services sector and London have managed to remain decidedly buoyant.

The special servicer believes that grade A office space in London has proved to be particularly robust and that demand will continue to be strong well into 2010.

Matthew Grefsheim, director, special servicing, states: “A grade office space is down from the peaks but it has been performing fairly well of late.  Investments with long-term covenants are proving to be very attractive in the current markets. Whilst a pension fund may struggle to find a yield of 4-5% in other assets, a 5.5-7% is not an unrealistic figure for grade A space.  We are also seeing some very resilient trends in the new build sector, which I believe will continue throughout the next year.

“For people and funds seeking higher yields, B grade assets are also proving attractive and I foresee an increased demand: firstly, because the current stock is undervalued and therefore has upside potential; and secondly, because some assets have been poorly managed and buyers with the relevant in-house or outsourced capability see upside opportunities.”

That is the warning from Peter Muir, newly-appointed director and head of Scottish rating at Colliers CRE.

He says there will be a hike in business rates in April and believes this could lead to a major battle between property owners and Scottish assessors.

He says the new rate demands for non-domestic premises, which come into force on 1 April 2010, are based on an analysis of rental levels and other relevant valuation factors, as they stood on 1 April 2008, several months before the property market fell sharply as a result of the global economic crisis.

 He goes on: “Assessors may argue that, as the impact of the global recession was after 1 April 2008, it cannot be taken into account when arriving at proposed values applicable to the new Valuation Rolls. However, we are experiencing exceptional times and it is important for ratepayers to have their proposed assessments checked and, if necessary, formally appealed.

 “Coupled with possible large increases in rateable values, we are still waiting to hear from the Scottish Government on whether or not the Transitional Relief scheme will be retained to cushion the blow in Scotland, as it has been in England.

 “We can expect to see a considerable number of appeals being lodged, which will be hard-fought on both sides, some of which are likely to go before the Valuation Appeal Committees and, in certain cases, the Lands Tribunal for Scotland. It is vital that revaluation appeals are lodged before the statutory timetable of 30 September this year. 

“It is envisaged that, given the current economic climate, a considerable number of appeals will be lodged by ratepayers or their retained agents, putting a strain on the committee’s ability to dispose of revaluation appeals by the statutory timescale of 31 December 2013.”

 Muir is bullish about the property industry’s chances of successful outcomes during the appeal stage, either through negotiation with the assessors or, if necessary, before local committees or Lands Tribunal.

 He states: “As well as the strong argument that valuations should take into account the decline in the market since 2008, there are a number of alternative avenues to challenge a property’s rateable value which had, until recently, been considered invalid grounds of appeal. 

“One example is the ‘disturbance appeals’ lodged in respect of the disruption caused to ratepayers along the route of Edinburgh’s new tramline. Until recently, temporary reductions for disturbance would have been opposed unless the works continued for a considerable period of time, in most cases over a year. In some cases, the tramwork appeals have been granted reductions for periods of less than six months.

 “The experience exists within the Scottish rating community to fight unfair valuations and we may well see clients and their agents banding together to present a single case, where the arguments of each appeal are similar. This would also reduce the significant burden on the committee in hearing each appeal in turn.

“The industry will be actively looking to identify potential cases which will clear the way for further successful appeals. Non- domestic rating looks set to be a real challenge for ratepayers in 2010 and beyond. Based on conversations I’ve had with clients, there is already an appetite to explore every avenue, to ensure proposed values are fair and reasonable.”

This has been spotted by the Institute of Chartered Accountants of Scotland (ICAS) which has revealed that HM Revenue & Customs (HMRC) has started a campaign aimed at dealing with non-compliance in the medical profession.

Its Tax Health Plan – a title which sounds good but has more to do with getting money into the Government coffers than health – will mean HMRC targeting doctors’ tax affairs using new information powers. Unpaid tax will be collected as well as interest and a fixed 10% penalty. This new approach of targeting particular employment sectors is expected to be used widely in the future.

However, an HMRC campaign has also been put in place to target the owners of fish and chip shops, with no restrictions on the penalties for non-compliance, a situation at odds with the fixed 10% penalty in the case of doctors.

Bob Crawford, convener of the ICAS Tax Committee, said: “It appears that our chippies are taking a battering compared to our doctors, and there’s no clear reason why.

“We support HMRC’s continuing efforts to tackle non-compliance, but for any campaign to gain acceptance, the criteria for penalties should be consistently applied. We question why doctors will be dealt with by a 10% fixed penalty, whilst fish and chip shops could be on the hook for a far higher penalty, for similar amounts of unpaid tax.”

The latest trio in Edinburgh is already attracting interest but raising the necessary finance is proving to be a key issue (maybe a bank can help?).

The latest three, as well as the others, have been put on the market by Jones Lang LaSalle, which has been retained by the bank to look at its retail holdings UK-wide, and the latest in Edinburgh city centre are:

·      1 Castle Terrace – a prominent 7,701 sq ft retail unit in the heart of the Exchange District, with change of use potential for a bar or restaurant, subject to planning.

·      7 – 9 North Bank Street – a 6,415 sq ft retail unit in Edinburgh’s historic Old Town, overlooking Princes Street Gardens, with mixed use development potential

·      32A Chambers Street – a 7,306 sq ft retail unit in a prime location with redevelopment or Class 3 potential subject to planning

Simon Bashford of the retail division at Jones Lang LaSalle said: “These three retail units are prominently located in key sites across the heart of the city centre and offer excellent opportunities for new occupiers.

“We are at the moment disposing nine HBOS properties – five in Edinburgh, two in Glasgow – including a prominent one in Buchanan Street – and one each in East Kilbride and Cumbernauld.”

Sixteen nights in the Edinburgh Royal Infirmary – taking in Christmas and Hogmany – will take its toll on any man but at least I missed 16 days of snow and freezing cold.

But my stay in hospital also took in another important anniversary – it was 55 years ago (January 2 1955) that I walked into the Dar es Salaam office of the Tanganyika Standard to start my life as a reporter.

I was so keen that I had left the Prince of Wales School in Nairobi having taught myself Pitman’s shorthand in the spare time I managed to find at the school. I still regard that as one of my greatest achievements and it is the shorthand which I used thereafter in the offices of the Galloway Gazette in Newton Stewart, the Fifeshire Advertiser in Kirkcaldy, the East African Standard in Nairobi, the Cambridge Evening News and The Scotsman in Edinburgh.

I was at The Scotsman for 23 years, ending up as Business Editor, before joining the world of PR while continuing to write for a number of publications including The Scotsman.

I still write a weekly column for The Scotsman, am chairman of a PR company, am co-founder of a commercial property website newspaper and have written a couple of books.

So I am lucky to say that I am still an active journalist after 55 years.

Are there many more around with that record?

Should there be some public acknowledgement of that achievement? A gong of some sort? Some sort of sponsorship from Google or Microsoft?

OK, I am chancing my arm – but I would not claim that is the first time in the last 55 years.

Only 51% of Britons (around 24 million) think owning their own home is critical/very important for a reasonable standard of living, a figure which appears to sharply contrast the property boom of the past 15-20 years.

This is a decrease of nine percentage points since the last time a report on the subject was commissioned in 2003, when 60% saw owning their home as critical/very important to having a reasonable standard of living.   

Perhaps reflecting the other demands they now have on their finances, such as supporting children and parents, it is those aged 55-64 whose attitudes have changed the most.  Forty four percent see owning their own home as very important for a reasonable standard of living, a drop of 17 percentage points from 2003 when the figure stood at nearly two thirds (61%).

The independent research study, which was undertaken by market research specialists Ipsos MORI to investigate the changing lifestyles and attitudes of the UK population, also revealed how the recession has helped people re-evaluate the importance of saving up for the future. Despite record-low interest rate figures over half (60%) of respondents see it as critical/very important to have savings for a reasonable standard of living.  

The cumulative effect of large rises in the cost of properties together with people’s fears of taking out huge loans during a recession has meant that many are put off making large purchases such as buying property.

For most, entering the housing market will naturally mean taking on substantial debt, and it seems that people would rather ensure they have financial stability for the future as opposed to entering into large levels of repayments.

Indeed, when planning a purchase of more than £1,000, over 30 million (64%) of respondents will tend to save up to buy, rather than take out finance or credit, a rise of six percentage points from 2003. This is especially true of the 16-24 year olds, where 65 per cent would try to save up themselves rather than take out finance or credit.

With the cost of a mortgage significantly reining in the spending power of homeowners, just 8% of them see going out on a Friday or Saturday night as critical/very important to a reasonable standard of living.  

Susan Barclay, head of marketing at Scottish Provident, said: “These findings underline how there is far less desire to get onto the property ladder than there once was. With many thousands of people unable to afford what are still high house prices, despite the recession, they are instead seemingly looking to save their hard-earned money to safeguard their or their children’s futures.”

* As of December 14 blogger Jim Dow will be hospitalised until the end of the year. Try to get by without him until then – Santa might help.

That’s the view of BNP Paribas Real Estate which has conducted research into the future demands of waste operators and it finds that waste and recycling occupiers could provide a much needed source of demand for distribution and logistics space, requiring an estimated 50m sq ft of space by 2015, the equivalent of 1,500 football pitches.

Don Young, senior director of Edinburgh industrial agency at BNP Paribas Real Estate, said: “EU rules will see landfill cut 75% by 2015 and eliminated totally by 2020.  We currently have 300 landfill sites throughout the UK but will require 3,000 other locations to meet recycling demand. This equates to at least 50 m sq ft of industrial space.

“Logistics properties are ideal sites as they boast essential storage space and transport links. With deals in the waste sector doubling rising from 2% of all industrial property deals in 2008 to 4% in 2009, clearly demand is on the up, which is great news to an otherwise beleaguered sector.”

BNP Paribas Real Estate’s research suggests that take-up in the waste sector will continue to increase up to 2015 with at least 10m sq ft of space being required each year to accommodate the demand. Based on last year’s take-up figures, this will equate to a third of total annual take-up in the distribution sector. 

The UK is currently home to 138m sq ft of available industrial space according to BNP PRE and is currently experiencing decreased rental values and reduced lease lengths, as well as the burden of empty rates.

Don Young continues: “There has been no trend set as yet in the types of deals that are being done with these types of operators in terms of both size and price.  We have witnessed transactions on units ranging from 30,000 sq ft to 300,000 sq ft at rents varying from £2.80 per sq ft to £7.80 sq ft.  “However, we have noted that leases being taken on these units are increasingly longer than in other sectors of the distribution market with some deals being struck on 20-year plus leases.  

“These types of occupiers are becoming increasingly popular to landlords, especially in light of their advancing technologies which mean that they are no longer viewed as being dirty and noisy neighbours. 

“Requirements from the waste and recycling sector pose an excellent opportunity to absorb some of the current supply in the short term as many of the units available will be suitable for immediate occupation providing landlords with the potential for a long and secure income.  In the long term opportunities exist for investors and developers with landbanks to create bespoke properties for these types of user which may see increasing demand for waste and recycling operators as anchor tenants at large distribution parks.”

He says that the nature of these operations means these sites will need to be evenly spread throughout the UK in order to collect and deposit waste ensuring that it will not just be the core distribution hubs such as the Midlands that will benefit from this demand. 

Scotland has 6.5m sq ft of available space and is able to offer a range of units in terms of both size and quality to accommodate this new influx of occupiers.