ALEX BRUMMER: the owners are severely beaten


Amidst the constant struggle between business owners and retailers, it is the owners who are often described as bad guys.

Traditional bugbears such as upward rent revisions play their part. But retailers have also had to contend with corporate prices, rising national living wages, foreign competitors and online competition.

It was a long time before Covid-19 immobilized the entire store industry, except grocers.

Deserted: Covid-19 has shut down the entire store industry ¿except grocers ¿

Deserted: Covid-19 has shut down the entire store industry – except grocers –

Hammerson, owner of Brent Cross in north London, limped his way through the lock. Investors have not forgiven the mistakes of CEO David Atkins.

He raised shareholders last year with a failed merger proposal with the indebted Trafford Park owner and had to back down after market sentiment destroyed the deal.

Hammerson is going to have a post-pandemic fresh start with ten-year veteran Atkins shown the way out as soon as a replacement is found. The crisis has shown that tenants can also behave badly.

There has been fury among the big landlords over the behavior of Boots (part of billionaire Stefano Pessina’s Walgreens pharmaceutical empire) for stopping paying rent when the stores were open.

Likewise, the manner in which Primark summarily suspended rent regulations has also been problematic, given the wide distribution of profitable businesses managed by owners Associated British Foods.

British Land (BL), owner of Meadowhall in Sheffield, saw rents fall by 43%.

She recognized early on that she would need to give smaller outlets in her malls, such as cafes, a vacation rental.

This was a sharp reduction in the value of its building stock, which was the main driver of a book loss of £ 1.1 billion in the year ending March 31. However, it is not all bad.

Most BL office rents are collected and, despite switching to working from home, she continues to rent.

Two projects in London – on Liverpool Street in the heart of the city and Triton Square near Euston – are expected to see the light this year and in 2021 after pandemic interruptions.

In the future, Hammerson and British Land are expected to benefit from their commercial assets in shopping malls rather than on High Street.

Parking is better and the space inside shopping centers facilitates social distance. The developers have taken a brutal hit and restoring rental income, property valuations and stock prices will not be easy.

Foley’s War

The investment manager M&G has had a difficult time since being seconded from Prudential.

The M&G brand still carries congratulations, but general manager John Foley struggled with the triple blow of the suspended real estate funds, giving meaning to the life assets inherited from the Pru and to the punishing blow of the actions of Covid-19.

In the largest movement since independence, M&G acquired the Ascentric platform from Royal London.

The deal brings in £ 14 billion in assets, owned by 90,000 customers, and is supported by 1,500 consulting firms.

If anyone doubts the value of platform technology, just look at the super-normal margins and profits of brokers Hargreaves Lansdown and AJ Bell, even in the midst of a pandemic.

The agreement offers a new opportunity to promote M&G and Prufunds, a packaged product popular with advisers. But Foley will need to ensure that Ascentric is managed independently and not just as a marketing tool for M&G.

Remarkably, even these dismal times have not dissuaded investors from investing in riskier stocks.

High-end St James’s Place advisers have rightly been criticized for supporting Neil Woodford’s funds to the end, gifts for staff, customers and newcomers, and costly management fees.

Yet there was an increase of £ 810 million in net inflows to £ 108.8 billion last year despite the setbacks in asset prices for coronaviruses. Remarkable!

Lovefest foodie

British grocers have brilliantly adapted to foreclosure. Tesco recruited 45,000 people and sales increased 12.7%.

The biggest winners were three of the smallest players: the cooperative, with its concentration on the local and the rural, up 30.8%, the Ocado up 32.5% and Iceland up 28.6%.

Lidl and Aldi also increased their sales, but market share was suppressed by the lack of an online offer. This could be a turning point for an unloved British sector.

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