A PERSONAL LOOK BACK AT 2019 AND FORWARD TO 2020
This is our last blog of 2019. To start, let’s consider my final post of last year, specifically, the concluding paragraph:
“2019 like any year is uncertain. We have Brexit and a possible general election to look forward to. The West End property market should hold up as we will be dealing with lease breaks and expiries from 2014 and 2015.
I hope that despite political uncertainty, next year will be a fantastic one both for business (and sport). The UK economically is doing well, interest rates and inflation are low, as are personal and corporation tax rates. Events (dear boy events!) are out of our control – what is in my firm’s control is the quality of service and advice we provide to our clients, to never give up on their behalf and to remember that you the customer is always right (mostly 😊 ).”
So, what has happened this year? In Sport, England won a thrilling Cricket World Cup and reached the final of the Rugby World Cup. Federer, Djokovic and Nadal played Wimbledon on one Planet, the rest on another. An English team won the European Cup (beating my club in the final), Mr Joshua and Mr Fury continue to be at the top in Boxing. Women’s Football goes from strength to strength and Tiger Woods winning the US Masters at the age of 43 shows, with hard work and ambition, age is not a barrier to success.
Politically, we had paralysis as Brexit dragged through Parliament. On a personal note, we live in a democracy. Everyone has an opinion. That opinion is given an opportunity to shape events by simply putting an X in a box every so often. You then respect the vote. Whatever the decision. It is sad how personal Politics, once private, is now all over social media.
The Conservatives won, by a landslide. Rightly or wrongly or whatever your view, we now have some stability. “Despite Brexit” the UK economy grew this year albeit a small amount. Growth is growth and with low interest rates, light taxation, a good time zone and I hope a Britain open to all – let’s see what happens post January 31st. The EU will be mad to allow its biggest customer to leave without a trade deal and the UK mad to lose its biggest client. Watch this space.
Had Labour won the election, I have taken a contra view that for the first 2 years, with £1trillion (that is a lot of £s) coming into the economy, we would have had a boom unlike any other. Then slight problem – we would have had to pay it back. Like Venezuela and Bolivia, paying it back doesn’t happen. Society falls apart. We do still have a £1.8trillion debt and a deficit of c.£40billion a year. The line is tight, I have every confidence in this Country. It is a great country and Prime Minister Johnson is a positive person. Whenever Britain puts its mind to something, it succeeds. We will. For those completely opposed to both Brexit and Boris – as Winston Churchill once said – “Democracy is the worse form of Government – except for the others.”
What does this mean for the Property market? This year, the office market was stable as lack of supply and demand from occupiers with lease expiries and break clauses kept the market flowing. It wasn’t an easy year, but there was activity. Like any year, the harder one worked, the luckier one was. 2020 will be stable as we deal with the lease events taken in 2010 and 2015.
A word about weWork. The writing was always on the wall. You cannot arbitrage leases at top rents without coming unstuck when rent-free periods expire. It is however, thanks to weWork that the Commercial Property Market product – i.e. Conventional Office Space – now offers bike racks, showers, cool reception areas, beer and design-led spaces. I did feel when going into some of these places as if in a Socialist Utopia, yet weWork, The Office Group, Regus and all the serviced office providers have taken the conventional market to a whole new level of service and product – we should be grateful. weWork should survive and compliment the conventional market further. I do believe that the CBRE/Hanna as well as the Knight Frank/Work.Life tie ups are conflicts of interest.
2020 will see further advances in technology, so-called PropTech. Being an advisor, one hopes our job is not decimated by tech – it is wonderful to see, work with and advise with some real pioneers and clients dedicated to making our lives easier. New technology, from artificial intelligence (AI) to 3D and virtual reality (VR), is set to help us improve our offering to clients. As a property business, I see our role as keeping on top of the opportunities new technology offers.
In travel, an industry that has been affected by tech, there are still some travel agents doing brilliantly – trust, expertise and personal service are so important.
The Office market needs to see advances in executing leases quicker, fully inclusive leases, flexibility and more thought out refurbishments of office space between 2000-10000sq.ft.
It is a privilege to work in the market we do. Next year, we have a new employee from January (to be announced 1st week of the year) who will assist with disposals and hopefully will improve further our Trans-Atlantic tie up.
We wish you and your families a very Merry Christmas and happy, healthy, fun and successful 2020.
The best is yet to come.