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An interesting week so far with some good indicators of what is giving the property market some impetus.

We have been provided information on a mixed bag of office investments and development land that either have short-term or no income. All of them provide opportunity to add value or create income through asset management or uplift on getting planning permission. These should hopefully attract some opportunistic purchasers.

Interestingly, we attended a promotional lunch for an office building on the M25 still seeking tenants. The fund manager of the building owner was adamant that the only investments they were looking at was based on existing secure income.

So, two elements of the market for 2 very differing purchasers, one likely to be private needing a reasonable amount of equity due to lack of debt, but seeing good capital uplift, and the funds who can probably bid with no debt and blow away the private market with their firepower, but with modest capital gain.

One of the guests, an agent, asked the fund and developer what they thought about the level of agent letting fees, which he felt had lagged behind investment fees in absolute terms. The response was ‘…bring us a deal that makes money and we will pay you double or even triple letting fees.’ I chipped in that we were still on parity in relative terms but when rents in towns like Watford had rents of over £30 per sq ft in the late ’80s but have never seen that level since and were now sub-£20 per sq ft it is a tricky conundrum. So let’s look to add value and get double fees!