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Thursday, 31 May 2012

Battersea Power Station – Salvation from the East?

The Financial Times (£) reports that a Malaysian pension fund is poised to seal a £375m deal to acquire Battersea Power Station, potentially drawing to a close the UK property industry’s longest running development saga.

The Irish Independent reports that one of the bidders was Chelsea Football Club.

The deal is expected to be a joint venture between the pension fund, SP Setia, a Malaysian property developer and RREEF, the real estate arm of Deutsche Bank.

The proposed development is reported to be a £1.4bn scheme of housing, offices and shops.

The key word really in the FT’s report is “potentially”.

I said in December there have been so many false dawns over the years for this great structure that Pink Floyd were being more prescient than they probably realised when they featured a pig flying over it on the cover of their 1977 album, Animals.

So were the Beatles when they featured the building in their 1965 movie, Help.

Built in the 1930s and decommissioned in 1983, the landmark Grade II* listed power station is the largest brick building in Europe.

The building is in a very poor condition and is on English Heritage’s Building’s at Risk register.

Another major challenge facing any developer is that they will be required to finance an extension of the Northern Line tube line to Battersea.

Wednesday, 30 May 2012

UK Blawg Review #10

I’m delighted and grateful to @charonqc for mentioning in dispatches Digging the Dirt in Part 4 of his excellent – and mammoth! – UK Blawg Review #10.

Charon QC’s Blawg Review #10 is a must-read for anyone interested in finding out about the many tremendous legal blogs out there, and his blog should be top of anyone’s list.

There aren’t many property law blogs about though – so we bat on!

Al-Jazeera to Become First Tenant of The Shard?

Al-Jazeera is in talks to move its London bureau to The Shard, reports Property Week (£) today.

This would be the first letting in the skyscraper.

The Shard became the tallest building in Europe in January this year, at 310m (1,016 ft), with 72 habitable floors.

The structure was completed in April 2012, and the tower will be open to the public and officially inaugurated on 5 July 2012 by His Excellency Sheikh Hamad Bin Jassem Bin Jabor Al Thani, Prime Minister and Minister of Foreign Affairs of the State of Qatar and Prince Andrew, the Duke of York.

The State of Qatar is the majority investor in The Shard, owning 95%.

The Shard will also be home to the 5-star Shangri-La hotel; apartments; three floors of restaurants; and offices.

Update 6/7/12

Not sure what's happening with the letting, but see here for a report on the opening. 

Photo by Bjmullan via wikipedia

Tuesday, 29 May 2012

Portas Pilots – More than Just a Makeover?

The government has announced the first 12 town centres to be named "Portas Pilots", giving them access to a shared pot of £1.2 million funding and expert advice in an attempt to regenerate high streets.

The announcement follows the independent review of high street shopping carried out by “Queen of Shops” Mary Portas.

Of the 370 applicants, the 12 chosen were Bedford, Croydon, Dartford, Bedminster (Bristol), Liskeard (Cornwall), Margate, Market Rasen (Lincolnshire), Nelson (Lancashire), Newbiggin by the Sea (Northumberland), Stockport, Stockton on Tees, and Wolverhampton.

12 more towns will be announced in July, plus a further 3 to be funded by the Greater London Authority.

The pilots will be mentored by leading property and retail experts.

The British Property Federation (BPF) announced yesterday that members of both the BPF and the British Council of Shopping Centres (BCSC) have registered with the Portas Pilots Mentoring Scheme website and stand ready to mentor the pilots in areas including planning, asset management and development.

Landlords have a clear incentive in wanting to try and breathe new life into high streets.

The Portas Review encouraged what it called a “contract of care” between landlords and their commercial tenants by promoting the adoption of the Code for Leasing Business Premises and supporting the use of lease structures other than upwards only rent reviews, especially for small businesses.

One way it suggested this might be achieved is by greater use of turnover-based rent reviews that give landlords a stake in the success of the tenant’s business.

The review also advocated monthly rather than quarterly rents.

You can see a summary of what each town proposes to do with the money on the government website.

Will the public and the economy see real results?

There’s certainly ammunition for the sceptics in some of the proposals.

Bicycle rickshaws, guerrilla gardening and yarn bombing?

Some of the more down-to-earth promises include new parking strategies and improvements to local transport – if that means free parking and more buses then high streets might have a chance to fight back.

If you want to keep an eye on how the chosen towns get on, there’s now a special blog called Portas Pilots providing an unofficial record.

Thursday, 24 May 2012

Olympic No Logo – Your Survival Guide to London 2012

It’s with a certain amount of trepidation that I broach the subject of the coming Olympiad – or rather London 2012.

Wiser counsel suggests “don’t go there”.

So it’s just as well the law firm Eversheds has produced a handy London 2012 Legal Toolkit to help keep you on the Olympic straight and narrow.

Here are some of the main points (updated with the new law):

·         Opening Hours - the Sunday Trading (London Olympic Games and Paralympic Games) Act 2012 (passed on 1 May 2012) provides for a temporary relaxation of Sunday trading laws to optimise the opportunities for businesses during the Games – it begins on Sunday 22 July 2012 and ends on Sunday 9 September 2012 . Check your lease to see if you can increase your trading hours and what scope your landlord might have to object. Consider planning restrictions and staffing requirements too.

·         Temporary lets and pop-up shops – already a feature at peak trading times such as Christmas, there may be opportunities to tap into the massive increase of localised trade during the Games. Check the planning position.

·         Access to services – The Equality Act 2010 requires services to be made available to everyone in the same way; important at all times and especially so when over one million disabled visitors are expected in London for the Olympic and Paralympic Games, and there may be more of a risk with temporary premises.  

·         Insurance - check you’re covered for extended trading hours or if you broaden the scope of your trade.

·         The supply chain - across London and beyond the Olympics is likely to bring disruption to the supply chain through higher volumes of traffic and road diversions; all this when you’ll want to increase stock to take advantage. Devise a strategy for deliveries and check for any restrictions on hours of delivery in leases, which may need to be relaxed temporarily – this can easily be done with a side letter if both parties to the lease agree.

·         Signage, displays and productsWatch out! Strict advertising laws protect official Olympic sponsors and infringements, however accidental, can bring severe penalties. In some circumstances (such as producing or selling counterfeit merhchandise) they can even be a criminal offence.

So if you’re thinking of giving your shop front a temporary makeover with an event-that-can’t-be-named theme, you do so at your peril.

Basically, don’t.

“Unless you are an official sponsor, certain key representations including the five interlocking Olympic Rings and Olympic logos cannot be used. But the restrictions go much further and mean that even seemingly innocent graphics which suggest an official association between the retailer and the Olympics could fall foul of the legislation.”

Amongst some of the items that make up the Games’ “Marks” are the words “Olympic”, “Olympiad”, “Olympian” (and their plurals and words very similar to them – eg “Olympix”), and “London 2012” is now apparently both a word and a mark.

Of course, assiduous protection of intellectual property rights isn’t only confined to the Olympics, as Harry PotterTM fans can attest.

This is an “editorial news piece”, so I’m pleading journalistic immunity and playing it safe with Socrates - well, he was Greek after all, plus he isn’t trademarked and as one of the founders of Western philosophy his reputation even managed to survive Pythonesque slurs of habitual inebriation.

Enjoy the Games!

UPDATE 17/7/12 - Shami Chakrabarti, director of Liberty, says response to small traders breaching rules should be "proportionate" - reports the Telegraph.

Photo by Ian W Scott via flickr

Certainty for Solar Subsidy

The sun is shining at last and with it comes some welcome clarity to the UK solar subsidy – Feed-in-Tariffs (FITs).

DECC is introducing regulations today which it says will put the FITs scheme on a more predictable, certain and sustainable footing for householders, businesses and the solar industry. 

The changes will take effect from 1 August 2012.

The tariff for a small domestic solar installation will be 16p per kilowatt hour, down from 21p, and will be set to decrease on a 3 month basis, with pauses if the market slows down. 

All tariffs will continue to be index-linked in line with the Retail Price Index (RPI) and the export tariff will be increased from 3.2p to 4.5p. 

DECC says the new tariffs should give a return on investment of over 6% for most typical, well-sited installations, and up to 8% for the larger bands.

More details are on the DECC press release.

Photo by Apollo 1981 via flickr

Monday, 21 May 2012

No Money for Property Developers & Debt Refinancing

A leading survey of commercial lending shows a continuing draining away of development finance.

This is one of the findings of the influential UK Commercial Property Lending Market report by De Montfort University, the largest of its kind to look at UK commercial property lending, and usefully summarised on Friday by the British Property Federation (BPF).

For the first time, no lending organisation said it would be prepared to lend against a speculative office development.

The survey of 72 lending teams from 63 banks and other lending organisations found that, while 2011 started with a degree of optimism for the commercial property lending market, this changed dramatically during the second half of the year as the crisis surrounding the Eurozone and the sovereign debt of member states brought “extremely tough times” to the economy.

I wonder what the mood is now, nearly 6 months after the end of the period covered by the report, given how well things are going and all...?

Respondents to the survey also expressed concerns about how the Financial Services Authority planned to implement “slotting”, which would introduce additional regulatory capital requirements to real estate lending, suggesting the consequences of the changes would be to reduce the volume and increase the cost of business.

The survey also reveals that debt held against UK commercial property continued to fall last year from £228.1bn to £212.3bn, a drop of 6.8%.

While the overall level of debt is on a downward trajectory and progress has been made in dealing with the distressed legacy debt, there is however a long way to go.

Between £72.5bn and £100bn will struggle to be refinanced on current market terms when the debt matures as it has an LTV (loan-to-value ratio) of over 70%.

Although progress has been made, banks still face a significant overhang of pre-recession property debt held on their balance sheets, with approximately £51bn due to mature during 2012 and a total of £153bn – 72% of outstanding debt – by year-end 2016. 

Liz Peace, chief executive of the BPF said:

“Lenders continue to chip away at this legacy of property debt but the economic situation – in the UK and overseas – means they do so with one hand tied behind their backs.”

There is one bright spot amid the gloom of the report - loan originations are apparently on the increase and new lenders to the market are increasing their market share to not all bad then.

See the BPF page for more facts and figures from the report.

Thursday, 17 May 2012

What if New Buildings Overshadow Your Solar Panels?

The recent cut in the feed-in-tariff subsidy might have cast a metaphorical shadow over solar panels.

But what if your neighbours are planning to build on their land in such a way that it puts your solar panels literally in the shade?

Is there a legal right to sunshine?

The efficiency of solar panels can be greatly reduced by shadows. A shadow falling on a small part of a panel can have a surprisingly large effect on output, which may result ultimately in a loss of income from any subsidies.

Landowners are entitled to build on their own land even though the new building might interfere with the enjoyment of neighbouring land so long as they have planning permission.

That is unless a neighbour has an established right to light, which would trump any planning permission.

Could a right to light help with solar panels?

It’s unlikely to be conclusive as the law currently stands.

The law on rights to light is complex (see these earlier posts for some of the issues).

Moreover, it’s concerned with illumination - generally speaking the amount of light received into rooms through windows - rather than sunshine on panels.

Unless one is formally granted by a deed, it normally takes 20 years for a building to acquire a right to light through its original windows - called acquiring the right by “prescription”.

Can a landowner grant, or allow a neighbour to acquire by prescription, a right to receive unobstructed sunlight to solar panels?

It might be possible for a deed to be drawn up granting such a right, although anyone approached for one is likely to demand a considerable price for it.

Could prescriptive rights to sunshine be developed?

It’s not something that’s been generally recognised in law so far; it’s seen instead as one of those intangible benefits, like a nice view, which the law doesn’t protect.

The benefits of solar panels are however more tangible, both environmentally and financially – so there’s a stronger argument for protecting them – but to date this hasn’t been tested in court.

The law on acquiring rights by prescription has not yet caught up with the green energy revolution.

There was a case in 1979 (Allen v Greenwood [1979] 1EGLR 137) concerning rights to light for a greenhouse, where Lord Goff presciently made reference in passing to solar heating, saying that in future it might be possible to separate heat, or other properties of the sun, from its light.

It’s not clear though how a court would treat any dispute involving modern solar panels.

It’s hard to see how the existing law, which deals with windows and illumination of rooms, could be applied to the amount of sunshine a rooftop or standalone array of panels should be entitled to receive (on the days the sun actually is shining).

Prescriptive rights would not be of much immediate use anyway if the 20 year period were deemed to run from the date the solar panels were installed.

Going to court to argue the case for a right to sunshine for solar panels under the current law would be a highly speculative action – a test case.

For there to be new law in this area then, perhaps it’s something for parliament to consider rather than the courts.

The Law Commission is reviewing the law on rights of light generally (see my post Charge of the Light Brigade from July 2011), and it hopes to publish a consultation paper in 2013, with a view to reporting in 2014 or 2015 with recommended legislation.

Will the Law Commission consider the specific question of solar panels and a right to sunshine?

It seems a good opportunity for those with an interest in this source of renewable energy to make their case and bring it to the Commission’s attention during the consultation process.

Any legislative change, even if it happens (and there would doubtless be plenty of arguments against it), is nevertheless going to take a long time.

In the meantime, could the planning process afford those with solar panels some protection?

In January for example the Islington Tribune reported that the London Borough was looking at revising its planning guidelines to stop new buildings casting shadows over solar panels.

Now however planning decisions must also be made in accordance with the National Planning Policy Framework and the presumption in favour of sustainable development.

Will the need to preserve the efficiency of solar panels be a sustainable objection in itself to a planning application to construct a tall building on neighbouring land that will cast a long shadow?

Or, rather like with tv aerials and satellite dishes, will it simply come down to caveat emptor – buyer beware?

Photo by Pink Dispatcher via flickr

Tuesday, 15 May 2012

Safe Agent Awareness Week - Don’t Get Your Fingers Burned

SAFE Agent Awareness week runs from 14th – 20th May.

It’s promoting the importance to landlords and tenants of identifying agents who are part of client money protection schemes.

All agents regulated by NALS, RICS, ARLA, NAEA and the Law Society maintain and operate separate designated client accounts where your money is held separately from the operating funds of the firm.

The campaign advises that if the agent you are using cannot provide you with the assurance of knowing they are covered by a client money protection scheme, the question you need to ask is why not?

The campaign is supported by the British Property Federation (BPF), which is reminding landlords that if their agent absconds with their rental income they may have little hope of recouping the money they lose, unless protected by a scheme.

The BPF says over half of all landlords (55%) use a letting agent, but most are probably unaware whether any money they handle is being protected by a client money protection scheme.

Anyone can set up a letting agency, and it doesn’t take long for them to be handling significant sums of rent, deposits and other payments.

You might be tempted to go with the cheapest, but they might be cutting corners and not protecting your money properly.

The simple message is, if you don’t use a SAFE agent, your money could be at risk.

Photo by MDrX via flickr