Monday property news update - 28 June
The stamp duty taper, the fate of Morrisons and a new breed of superyacht
3 minutes to read
The taper
The stamp duty holiday has been a boon to the housing market in England and Wales over recent months. From Wednesday this week the saving available to buyers declines as the benefit is cut back.
The impact on the market has been a growing question and something we have looked at in recent notes. In today’s analysis Tom Bill suggests markets where there has been greater flexibility around asking prices are likely to be most resilient to the tapering of the tax holiday.
According to his investigation, eight of the ten local authorities that saw the highest proportion of asking price reductions between January and the middle of June this year were in London.
Superyacht
The developer of what will become the world's largest superyacht is offering 39 apartments for sale on board at asking prices starting at €9.5m, according to the FT.
The 220-metre vessel is due to launch in 2024. "Somnio" will be more than 40 metres longer than the current record holder Azzam, owned by the Abu Dhabi royal family. We covered Azzam, which boasts a golf training room and chandeliers that have been specially designed so they don’t rattle at speed, in this year's Wealth Report.
The world's fleet of superyachts - vessels generally defined as being at least 40m long - is swelling, and provides a good barometer for the manner in which fortunes have grown over the past twelve months. Analysts expect sales of new vessels to climb 11% during the next three years.
Morrisons
Earlier this month supermarket group Morrisons rejected a proposed £5.52 billion pound cash offer from US private equity firm Clayton, Dubilier & Rice after saying the offer undervalued the business. Takeovers of British businesses rarely come without opposition, and the Labour party has urged the government to step in to ensure the deal preserves jobs and food security.
Stephen Springham's latest piece lays out the impetus for the deal. Real estate is likely to be among the biggest draws, and Morrisons reportedly owns 85%+ of the freeholds of its property portfolio (stores, distribution centres, offices etc), partly a by-product of being predominantly a big-box operator. Sentiment towards supermarkets is also positive, with foodstores bucking the trend in a struggling sector.
Recent private equity involvement in British retail has produced patchy results, in part because "retailers need to be run as retailers, by retailers," notes Stephen. Should the approach prove to be successful, much will depend on the scope of Sir Terry Leahy's involvement, he adds. Mr Leahy, who is advising CD&R, was one of the driving forces behind Tesco’s meteoric rise in the 1990s and 2000s.
WFH
UBS plans to allow up to two-thirds of its staff to mix working from home and the office on a permanent basis. The bank's policy stands in sharp contrast to Goldman Sachs and Morgan Stanley, which have called staff back to the office.
We've discussed previously how banks, particularly those in the US, are becoming a microcosm of the world's work from home (WFH) dilemma. According to the FT report, UBS is betting its flexible policy will give it an edge over Wall Street banks when recruiting.
How this battle over talent pans out will be among the biggest factors dictating the extent to which hybrid policies take hold, as will be the development of technology that enables remote work without losses to productivity.
In other news...
In a new Rural Update, Andrew Shirley tackles net zero, hare coursing and income pressures for agri-businesses.
Elsewhere - investors are building growing portfolios of houses to rent out on Airbnb, the EU carbon market to expand to shipping, housing and transport, the swelling pool of UK corporate cash, the countryside’s grass is not greener for everyone, and finally, Haldane says inflation will keep building.
Photo by Arno Senoner on Unsplash