On Monday, 17 September,  the IWIRC London Network launched its inaugural BE INFORMED campaign with a session on Company Voluntary Arrangements. The event was hosted and sponsored by K&L Gates and special counsel Clare Tanner introduced the speakers and reminded attendees of the benefits of joining IWIRC. 

 

Emma Jackson and Luisa Janisch, both Associate Directors at commercial real estate giant CBRE gave an update on the UK property market.  

 

 

Emma provided an economic outlook and then focussed on the office space sector for the South East and the regions. Emma commented that the South East office demand was the highest in 18 years and that by the year end total take-up should exceed 2017 levels.  Also of note in the South East office markets,  there is a finite supply of Grade A space which could lead to competition amongst occupiers and boost pre-let activity. The next wave of new developments in the South East office markets are likely to be town centre focused around the main transport hubs of Crossrail such as Slough, Maidenhead and Reading.  

 

Looking ahead at the key regional city markets, she commented that:

• Take-up in the regional cities has been remarkably strong in H1 2018 with many cities outperforming their 5 year average.

• Grade A supply constraints were emerging in a number of markets such as Bristol and Glasgow,  limiting choice to occupiers.

• Major regional city economies have been growing at almost twice as fast as the UK overall despite some economic headwinds

• Markets will increasingly be influenced by transport improvements (e.g. Heathrow, Crossrail, HS2)

• There has been a huge growth in demand for office space from flexible service providers and this trend will continue in H2.

 

 

Luisa’s talk focussed on the UK retail sector where the story isn’t all gloom, despite the recent newspaper stories. Footfall was down in August but that is to be expected with people going on holidays and spending money elsewhere. The continued squeeze on wages reins in consumer’s spending, as value retailers and discounters continue to expand rapidly. CBRE research has highlighted that the share of online retail take-up within the logistics sector grew from 0.6% in 2012 to 32.2% in H1 2018, as the demand for e-commerce and fast, convenient delivery options increases. 

 

Luisa also highlighted a trend of traditional online only retailers, such as Made.com and Boden who are expanding into opening a physical store to enhance the brand value and give customers the chance to look and feel the product before ordering it online. In retail, Luisa’s view is that there will be increased polarisation in the retail market.

 

 

And, indeed, retailers who need to “rightsize” their portfolios are doing so at this very moment – using the company voluntary arrangement, a process under the Insolvency Act, to do so. Katharina Crinson from Freshfields stepping in for Caroline Dodman at CMS presented. Katharina outlined the CVA process and methods to challenge a CVA. She made the point that there is very little case law on CVAs at present and most challenges, if made, are settled out of court. Whether this trend is likely to continue was a question picked up by audience members in the Q & A. Katharina touched on landlord sentiment in relation to CVAs and one of the audience questions was why the CVA was so prominent in this space. 2018 has been the year of the CVA and this trend is unlikely to change in the last part of the year. 

 

 

The next IWIRC London Network event is on 28 November and part of the BE CONNECTED series of events. The event will be held at White & Case (5 Old Broad Street, London EC2N 1DW)  from 6.30 pm to 9.30pm and raise funds for the charity Dress for Success. The event is £10 for members which will go directly to the charity and £20 for non members of which £10  will go to Dress for Success. Dress for Success prepares women for their upcoming job interview, placement or training programme, by providing professional clothing and career advice, amongst others. We hope to see you there!

 

The IWIRC London Network thanks its founding sponsors: AlixPartners, GLAS, Grant Thornton, Griffins and Debenhams Ottaway.