Latest news - property, engineering, utilities
Industry News Update 8 August 2008
8th Aug 2008
A weekly update of the latest news from the engineering, property and utility sectors.
Retail Week - 1 August
Tesco to ramp up banking offer in stores following £950m RBS deal
The supermarket will offer banking facilities in 200 Tesco Extra stores following its deal to buy out RBS's 50% stake in Tesco Finance
The deal means that Tesco can expand its services offer and is looking to make profits of over £1 billion a year, more than double that made last year.
Decathlon sets sights on 40 stores in UK growth assault
French sportswear retailer has aggressive plans for UK expansion
With only 6 stores since its UK arrival in 1997 it is looking at opportunities across the country.
Decathlon is also in the early stages of planning an assault on the Indian market but recently pulled out of the US after poor performance.
Let battle commence
Retailers are preparing to take on landlords over quarterly rents - unprecedented in the industry due to the number of high profile retailers involved including Arcadia, Next, B&Q, Carphone Warehouse and Boots working together over the issue
Due to the current economic situation, retailers led by the British Retail Consortium (BRC) are appealing to landlords to change the way rent is paid 3 months in advance. This holds up cash flow for the retailer and allows the landlord to profit further from interest gained by the rent payment.
Land Securities' Ronan Faherty says he is surprised by this as it gives the impression landlords aren't flexible, despite a number of schemes aiming to alleviate tenants' concerns.
Utility Week - 8 August
Cost of Capital must be realistic
Water companies are urging Ofwat to take account of the current market conditions when setting the cost of capital in PR09
With the cost of debt up, this will have implications for funding 'largest ever capital programme'.
Thames Water is expected to increase expenditure by around 20% in AMP5
Northumbrian Water by contrast announced its draft business plan assumed a wacc of 4.7%, below 5.1% of PR04.
One City analyst said this would not be looked on favourably by the other water companies looking to argue for a higher cost of capital.
Frontier plan for leakage loses favour with Ofwat
Plans have been abandoned for 'frontier' approach to setting leakage targets
This innovative approach to measurement aims to incentivise less efficient companies to catch up with the sector's best performers
All UK water companies hit or beat their leakage targets last year, reducing leakage nationwide by 127 million litres per day.
Start flood protection work now
The water industry needs to begin work now to cope with future intense rainfall events, according to the Water UK Flooding Review Group.
It also advised that Ofwat should also allow additional expenditure to counter 'rare but extreme catastrophic events'.
The group also said the industry should develop minimum customer service standards to help regulators and customers understand which resilience methods offer value for money
Property Week - 1 August
Bluewater nets Hollister fashion brand
Hollister, the Abercrombie & Fitch young fashion brand is to open in Bluewater shopping centre, Brentcross and Westfield in White City.
Klepierre makes 2.7bn Nordic entrance
French developer Klepierre and Dutch pension fund ABP have bought Norwegian shopper centre owner and operator Steen & Strom
The deal gives Klepierre and ABP 30 shopping centres in Norway, Sweden and Denmark
Flight of the Eagle
Paddington, Regent’s Park and Battersea are tipped as new homes for the US embassy, which is looking for new premises.
The embassy is keen to buy its own property and is unble to buy it's current home from it's landlord the Duke of Westminster.
The ambassador wants the embassy to be close to his residence on Regent’s Park.
Profit plunge for world’s top two property services firms
CBRE and Jones Laing Lasalle suffered severe profit falls in the second quarter after fees from transactions were savaged by credit crunch
CBRE revealed an 88% plunge and JLL an 69% drop in profit
The poor performance is down to less investment and leasing activity
Building - 1 August
RIBA’s first female president backs performance based pay
Ruth Reed, elected last week as RIBA’s first female president, is to campaign for architects to be awarded higher fees on a performance related basis.
Added value could be calculated using case studies to show how a building's efficiency has been influenced by its design.
Emergency talks over £550M New Street Station
Foreign Office Architects (FOA) and Network Rail have been holding emergency talks after a row threatened to throw the £550M Birmingham New Street project into disarray.
FOA has been at loggerheads with Network Rail over the role lead consultant Atkins will have.
FOA was supposed to have worked with Atkins and project architect Building Design Partnership (BDP) during the construction of the station’s exterior and atrium.
Network Rail made moves to buy the copyright for its design and hand them straight to Atkins, effectively cutting FOA out of the contract.
FOA is concerned that lack of a design overseer may affect the quality of the finished building, and is reconsidering its role in the project as a result.
Work on Red Sea Bridge to start within 18 months
Sheik Tarek Bin Laden's’s plan to link Africa and Asia with a 28KM bridge is set to go ahead.
Arabian property giant Al Noor Holdings this week insisted it was determined to make its Al Noor Cities plan a reality.
The project team is in talks with architects from the UK and US to master plan sections of the cities and was aiming to start the first phase of building within 18 months.
The scheme will be built over 15 years in the east African Republic and in Yemen.
two “Cities of Light” in Djibouti and Yemen will be joined by the £12.5bn suspension bridge over the Red Sea, which will be the longest bridge of its type in the world.
Water Active – Issue 7
[i]Commitment to catchment sensitive farming continues
The next phase of the England Catchment Sensitive Farming Delivery Initiative programme to help farmers tackle the cause of harmful water pollution is taking shape.
Defra and its delivery partners for the initiative, Natural England and the EA have now mapped out the next stages of the programme which will focus on Engagement with farmers.
In the first two years the scheme hasdelivered advice to over 6000 farmers.
Advice was delivered through more than 5 hundred group events and over 4,700 one-to-one farm visits.
Over 80% of farmers receiving advice from the ECSFDI confirmed their knowledge of water pollution had increased.
Apprenticeship scheme expanded
The UK water industry has received major expansion in the apprenticeship opportunities it can now offer to young people and adult learners.
Energy and Utility Skills – has been working with regulated water companies and utility contractors to design new apprenticeships that are now approved for England, NI, Scotland and Wales.
Apprenticeships provide solution to addressing shortages within organisations, whilst delivering tangible benefits such as increased productivity, profitability, staff retention and lower training costs.
