Is commercial property investment no longer a safe haven?

Commercial property pre-pandemic was considered one of the more secure options for money by investors, particularly by pension fund managers.

But the consequences of changing consumer behaviour, the aftermath of the pandemic lockdown and the retail High Street revolution would suggest a pause for thought and perhaps a rethink.

While the most obvious sector of business related property to be in trouble is retail it may prove not to be the only one.

Retail has been hit by a significant move to online shopping that has been building for several years, but it is also beset by what has been called an archaic rental collection system, whereby rents are payable quarterly.

The most recent Quarter Day was on 24th June (Midsummer Day) and it has been estimated that in the region of just 14% of retailers were paid their rent that day.

It was no surprise, therefore that Intu, owner of some of the UK’s biggest shopping centres, such as Lakeside and Manchester’s Trafford Centre called...

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Directors should be mindful of future investment and changing values post pandemic

Businesses planning their post-pandemic strategy are likely to be seeking future investment to shore up their balance sheets but directors will need to be mindful of the changing values of stakeholders and in particular those of their customers who in turn are influencing investors.

Before the immense disruption caused globally by the onset of the pandemic, climate change, global warming and the need for a more sustainable form of economics were a major preoccupation.

That preoccupation has not gone away.

While physical attendance at a second summit on ethical finance by international delegates from Government officials, financial institutions, consumer goods corporations, supply chain intermediaries and conservation organisations planned for Edinburgh this month has had to be cancelled, it has now been replaced by a virtual summit.

And this month, the UK’s Investors Association published a paper on the future of investment in which it, too, identified the importance going...

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Protecting your business from technology post-pandemic

Last week one of my blogs highlighted the growth opportunities to businesses of adopting new technology post-pandemic.

However, businesses, like consumers, can also be vulnerable if you do not take steps to understand and control the adoption and use of software and technology in your company.

Already, reports have emerged of new scams specifically related to Coronavirus. They have resulted in consumers being promised delivery of products for which they have paid but which subsequently discover do not to exist.

Then, there have been the scams to remote workers related to fake contacts from alleged payroll departments and internet service providers asking for personal information, according to TSB Bank.

But in a business context, while digital technology has been embraced to make it easy to continue to work during the pandemic lockdown, in the future how and what technology is used needs to be carefully considered and integrated with business processes going forward.

The temptation...

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Tech offers growth opportunities post lockdown

It is likely that there will be many growth opportunities for companies to embrace the use of technology after the Coronavirus lockdown.

Many organisations and businesses have had to switch to a remote way of continuing to provide their goods and services and this has affected everything from medical consultations to teaching, even more online shopping and whole offices now remote working.

Having discovered that it is possible to function in this way it is likely that many will carry on doing so when restrictions are eased and this will provide growth opportunities for tech companies.

Among the beneficiaries already have been providers of online tools including conferencing facilities, such as Zoom, Microsoft Teams and Skype, productivity and project management tools like Asana and Trello and online collaborative and co-creation tools like Miro and MURAL.

But for all their benefits there are also caveats in terms of speed and reliability of broadband, security and protection from...

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Directors should plan for innovative UK manufacturing to revive their businesses post-Coronavirus

UK manufacturing was in dire straits even at the onset of the Coronavirus lockdown, with the CBI (Confederation of British Industry) reporting output dropping at its fastest pace since 1975 in the first quarter of 2020.

As it progressed the pandemic and lockdown revealed many weaknesses in the global supply chain, most notably in the availability of PPE (Personal Protective Equipment) for frontline health and care workers.

However, it is often said that in disaster there are also opportunities and many businesses demonstrated their agility in switching their usual production to manufacturing both PPE and sanitising equipment, for example.

But, as attitudes change, so the opportunities for innovation increase and it is a good time for directors to start planning strategies for not only producing essential supply chain elements within the UK but also for devising new products to fit the new agendas.

The UK Government has announced two initiatives aimed to protect UK...

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A complex jigsaw puzzle for directors in planning a post-coronavirus retail strategy

As more restrictions are relaxed, allowing increasing numbers of retailers to re-open, directors have many issues to consider when planning their retail strategy for recovery.

Given that High Street retail was already in serious trouble, directors need to address a number of complex questions to assess their chances of survival and develop their retail strategy for reopening, short-term survival and growth.

This will include understanding and meeting the interests of many stakeholders including customers, staff, suppliers, landlords, investors and regulators.

Reducing overheads is likely to be key, given the need to include social distancing measures that will inevitably limit numbers in-store at any one time, thus reducing the number of transactions that can be achieved in any working day. This raises the question of whether or not the business is viable as it needs sufficient revenue to cover the cost of staffing, utilities, rent and related premises expenses while also generating...

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What is the difference between a Depression and a Recession?

Both a recession and a depression are characterised by an economic decline but the difference between them is down to the length of their duration with depressions lasting years.

An economy is defined as being in recession when there have been two consecutive quarters in which growth as measured by GDP (Growth Domestic Product) has contracted.

This is usually caused by a reduction in business activity and consumer confidence, such that businesses may start laying off employees and cutting back on production and on investment as their focus shifts almost entirely to their cash flow and balance sheet.

In the most recent recession, in 2008, the precipitating factor was a liquidity crisis that began in the USA where banks had lent what was perceived to be too much money on what came to be seen as risky mortgages on which borrowers then defaulted. This resulted in a loss of confidence in banks, which declined to lend to each other which in turn led to a liquidity crisis.

Recessions are...

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The Phases for dealing with a pandemic involving Zoonotic diseases

coronavirus covid-19 May 21, 2020

In 1999 the WHO (World Health Organisation) devised a blueprint based on Phases for dealing with a pandemic, subsequently updated in 2005.

It set out six Phases, to provide a global framework to aid countries to prepare for a pandemic and plan their response.

The first three Phases cover animal transmission escalating to domesticated animals and eventually germs spreading to humans defined as a Zoonotic disease. These initial phases also deal with the preparation, capacity development and response planning activities, while the last three Phases deal with the response and mitigation efforts when a disease transmits from human to human.

Phase 4 deals with verified human-to-human transmission of an animal or human-animal virus and its ability to cause “community-level outbreaks”.  Phase 5 deals with the human-to-human spread of the virus into at least two countries in one WHO region and the sixth Phase is the Pandemic Phase where virus transmits from human-to-human in...

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Potential Coronavirus pandemic business winners and losers

Given the slight easing of Coronavirus-related restrictions a week ago, some businesses are in the very early stages of preparing to return to “normal” but which businesses are likely to emerge as the winners and losers in the future?

The Insolvency Service is now publishing its figures monthly and the April figures were released last week. They reported that “numbers of companies and individuals entering insolvency in April 2020 broadly returned to pre-lockdown March levels for most insolvency types” and their figures showed that total company insolvencies in April 2020 had decreased by 17% when compared to April 2019, with a total of 1,196 company insolvencies of which the majority were CVLs (Company Voluntary Liquidations). These numbers suggest no influence in insolvency from Coronavirus yet.

The figures come with a warning, however, that the operation of courts and tribunals had been much reduced, HMRC had reduced enforcement activity and there were...

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How will work patterns change once Coronavirus restrictions have eased?

When working life resumes properly once Coronavirus restrictions have eased people may find that their work patterns are substantially different from previously.

While, sadly, some SMEs will not have survived others may find that their agility and perhaps new innovations introduced during lockdown will have given their businesses a new lease of life for the future.

Those who have shown consideration for their employees, suppliers and customers will have built up a level of goodwill that will stand them in good stead for the future.

I shall examine in another blog those businesses, sectors and processes that may benefit from the changed landscape but in this blog I am focusing on the likely changes to business work patterns and the relationships between employers and their stakeholders.

Because, of course, employers are also people, they will have discovered that they and their families are no more immune to the health risks of the pandemic than any of their employees.

This may well...

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