Pinsent and Brodies to share new prime office complex

Prime site: Capital Square


 

Law firm Pinsent Masons is to share premises with its big rival Brodies in prime new offices in the centre of Edinburgh.

The two firms, which have each claimed to be the biggest in Scotland, will move to the Capital Square scheme now under construction behind the Sheraton Hotel in the Exchange District.

Pinsent Masons, which acquired McGrigors in 2012, is leasing 25,000 sq ft of floorspace over two of the eight floors.

Brodies will occupy the top three floors (five, six and seven) of the 122,000 sq ft complex being developed by BAM Properties in partnership with Hermes Investment Management. It is scheduled for completion in May 2020.

Pinsent Masons, which is ranked amongst the world’s biggest 75 law firms, has offices in Glasgow and Aberdeen and employs more than 500 lawyers and support staff in Scotland. 

Partner and head of its Edinburgh office, Ewan Alexander, said: “Scotland is a critical market for us and we required premises that reflect our ongoing commitment to the capital and market-leading position.

“There has been a dearth of suitable Grade A office accommodation in Edinburgh, so we are delighted to have agreed a lease for premises at the heart of the city’s business district.

“It is important that our staff are located in a prime position, which is accessible to key decision makers and national and local government agencies.” 

The design and fit-out process, which will be heavily influenced by the opinions of the Pinsent Masons team, will focus on promoting well-being in the workplace and will follow the firm-wide policy of encouraging an agile working environment. 

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Mr Alexander added: “The emphasis nowadays is upon innovation and collaboration as much as legal expertise.”

The firm’s 200-plus Edinburgh lawyers and support staff currently work between offices in Princes Exchange and nearby Edinburgh Quay.  

Dougie Peters, Managing Director, BAM Properties said: “We are delighted to welcome Pinsent Masons to Capital Square which represents our second major letting success in recent weeks.

“More than half of the building is now pre-let which demonstrates how attractive Capital Square is as a working environment and location for modern occupiers seeking to attract and retain the best talent.

“Quality Grade A accommodation is key for Edinburgh to remain attractive to occupiers and Capital Square is providing first class office space at a time of limited supply in the market.” 

Some 54,000 sq ft remains available for let at Capital Square.

Ian Cody, Director, asset management at Hermes Investment Management, added: “We look forward to welcoming Pinsent Masons once the building is complete.”

CBRE and Montagu Evans represented BAM Properties and Hermes Investment Management. CBRE acted on behalf of Pinsent Masons.

 

Pinsent and Brodies to share new prime office complex was originally published on Daily Business

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SSE extends wind portfolio with Forth acquisition

Offshore wind

SSE expanding its portfolio


 

Energy company SSE has extended its offshore wind portfolio by taking full control of a wind farm in the Firth of Forth.

It is exercising its pre-emption rights to acquire the 50% of Fluor’s share in Seagreen Wind Energy that it doesn’t own in  a single payment of £118m.

The transaction is subject to approval from Crown Estate Scotland, the public body that manages leasing of Scotland’s seabed. The future ownership structure will be further reviewed in the coming months with the view to maximising value for SSE shareholders.

Increasing its share in Seagreen is in line with SSE’s offshore wind ambitions and with the Group’s broader strategy to create value for shareholders and society from developing, owning and operating energy and related infrastructure and services in a sustainable way, with regulated energy networks and renewable energy at its core.

Martin Pibworth, SSE’s Wholesale Director, said: “The Seagreen acquisition aligns with SSE’s ambition to create value from owning, operating and developing clean energy assets and infrastructure.

“We are looking forward to taking full ownership of Seagreen as we progress through this critical phase towards the CfD auction, expected in May 2019. SSE’s expertise in the development, construction and operation of offshore wind will be an asset to Seagreen, and we will review the ownership structure in due course.”

The Seagreen acquisition takes SSE’s total offshore wind portfolio to around 4GW.

SSE extends wind portfolio with Forth acquisition was originally published on Daily Business

Next raises forecast after profits edge higher

Next Straiton

Next: raising its forecast


 

Fashion and homewares chain Next is raising its full year forecast after profit before tax for the half year edged 0.5% higher at £311.1m.

The company said full price sales were 4.5% higher on last year, ahead of the 1% guidance given in January and the 2.2% in May.  Total first half sales fell by 6.9% to £925.1m.

The company said in August that it believed that there was a high risk that the sales gained in July would be offset by losses in August.

“As it turned out, we did not experience any material loss of sales in August or early September, so we are now raising our central guidance for full year profit before tax by £10m to £727m.

“This is broadly in line with last year’s profit of £726.1m and would deliver a growth in Earnings Per Share of 5.0%.”

It added that the UK retail market remains volatile, “subject to powerful structural and cyclical changes.  Many of these headwinds have not abated.  As expected, sales in our stores (which now account for just under half of our turnover) continue to be challenging.

“We believe the over-performance in the first half was flattered by the unusually warm summer and we remain cautious in our outlook for the rest of the year “

Next raises forecast after profits edge higher was originally published on Daily Business

AG Barr defies sugar tax to sweeten investor appetite

Irn-Bru

AG Barr saw another six months of strong sales


 

Irn-Bru maker AG Barr shrugged off the new sugar tax, the March cold snap and CO2 shortage and raised profits in a strong first half to the year.

Analysts have been keen to learn what impact the triple whammy of the levy, Beast from the East and gas supply issue would have on the interim figures.

The company, which also makes Rubicon, Strathmore water and Funkin, turned in a 4% rise in pre-exceptional pre-tax profits to £18.2 million in the six months ended 28 July (2017: £17.5m). Revenue grew by 5.5% to £136.9m (2017 : £129.8m).

Roger White, Chief Executive, said: “We have delivered a solid financial performance in the first half of the financial year, navigating through the Soft Drinks Industry Levy implementation, reformulation, extremes of weather and CO2 shortages in addition to a dynamic consumer, customer and macro-economic environment. 

“Our core brands have performed well and have good momentum with both consumers and trade customers. 

“We will continue to ensure our actions and investment decisions support our long term growth strategy. 

“We plan to invest further across the second half of the financial year which we anticipate will have a moderate impact on margins.  We remain on target to meet our profit expectations for the full year.”

Alasdair Ronald, senior investment manager at Brewin Dolphin, said: “Perhaps it’s no surprise that analysts will be focusing on the performance of Irn-Bru, which has contained 50% less sugar since January.

“The company’s claim that most people won’t taste the difference appears to have been borne out in these results and the market will also be pleased with early signs of success with new products and partnerships – AG Barr highlighted its ventures with San Benedetto and Bundaberg, in particular.”

Financial headlines

●   Revenue grew by 5.5% to £136.9m (2017 : £129.8m) 

●    Profit before tax and exceptional items increased 4.0% to £18.2m (2017 : £17.5m) 

●    Statutory profit before tax of £18.2m, compared to £19.4m in the prior year (which included £2.5m of exceptional gain from a property disposal)

●    Operating margin of 13.4% (2017 : 13.9% before exceptional items) 

●    Earnings per share before exceptional items increased by 8.6% to 12.74p (2017 : 11.73p) 

●    Free cash flow of £9.4m (2017 : £20.0m) 2has resulted in a net funds position of £4.2m at the period end (2017 : net funds of £7.9m)

●   An interim dividend of 3.90 pence per share (2017 : 3.71 pence) has been declared, an increase of 5% on the prior year

●    Balance sheet remains strong

●    Share repurchase programme on track

Strategic highlights

●    Solid financial performance having carefully navigated through a challenging and volatile marketplace

●   Continued investment in core brands and innovation delivering strong revenue performance and market share gains

●    Newly established partnerships with San Benedetto and Bundaberg progressing well

●    Funkin brand gaining traction in new formats and new market segments

●    Further progress across sustainability agenda with commitment to introduce up to 50% recycled material content into our PET bottles

AG Barr defies sugar tax to sweeten investor appetite was originally published on Daily Business

Universities unite to boost digital skills training

Data Science Workshop Pupils at Newbattle High School

Data science workshop at Newbattle High School 


 

The University of Edinburgh and Heriot-Watt University today unveil plans to improve digital skills across south east Scotland.

The £661m Data-Driven Innovation initiative is a key part of the recently-announced Edinburgh and South East Scotland City Region Deal and aims to train 100,000 people in data skills over the next decade. 

It is estimated that Scotland needs around 13,000 extra workers each year with data skills as the workplace is transformed. The Scottish Government’s Digital Strategy, published in 2017, included plans to tackle this digital skills gap while growing the Scottish economy.

Together, the two universities will increase the provision of data science teaching for their students, and support schools and colleges across the region to provide digital skills teaching and training.

The region’s supercomputing capabilities will also be strengthened with investment in a data analysis facility, which will help 1,000 organisations use data to innovate within their sectors.

Scottish Secretary David Mundell, said: “This exciting project – backed by £270m of UK Government investment – will ensure that the UK leads the world in technologies of the future and benefits from the economic growth opportunities this brings.”

Jarmo Eskelinen has been appointed to lead the Data-Driven Innovation initiative. He comes to Edinburgh from his previous role as chief innovation and technology officer at the London-based Future Cities Catapult initiative.

The £1.3bn Edinburgh and South East Scotland City Region Deal was announced by the Prime Minister and First Minister at the University of Edinburgh on 7 August.

Scottish Cities Alliance

In a separate announcement the Scottish Cities Alliance will today launch its biggest investment prospectus to date at the newly-opened V&A Dundee, highlighting the huge potential in the seven cities to the investor world.

The Alliance has helped to bring in more than £125 million to the Scottish economy to date and also runs the Smart Cities Scotland programme, which has seen more than £24m invested in the seven cities’ smart ambitions, with £10m of that total coming from European funding.

This work is creating a network of Smart Cities across Scotland which will use information, or data, gathered from technology, to improve services, create new opportunities for business and enhance the quality of life for citizens.

Universities unite to boost digital skills training was originally published on Daily Business

Pensioners would be hit by Leonard’s tax on wealthy

Richard Leonard at Penicuik

Richard Leonard: call for levy on wealthiest Scots (pic: Terry Murden)


 

Pensioners would be among the hardest hit by Scottish Labour leader Richard Leonard’s proposed windfall tax on the wealthiest Scots, according to the SNP. 

Mr Leonard used his conference speech at the party’s Liverpool conference to propose a 1% levy on Scotland’s wealthiest 10% which he claims would raise £3.7bn.

The SNP said official figures show that 49% of those affected are pensioner households and described Mr Leonard’s proposal as ‘half-baked’. 

Mr Leonard told Labour delegates“In Scotland today the richest one per cent own more personal wealth than the whole of the poorest 50 per cent put together. 

“So instead of a fervent devotion to inequality from the Tories, and timidity and mediocrity from the Nationalists, it is time for moral courage and audacity from Labour. Which is why I have said that the time has come to consider a wealth tax.

“A one per cent windfall tax on Scotland’s wealthiest 10 per cent would raise £3.7billion to invest in public services.”

SNP MSP Bruce Crawford commented: “Scottish Labour have had a terrible conference – with Richard Leonard trying to out-Tory the Tories on the democratic right of the people of Scotland to decide their future. That is a ridiculous and untenable for Labour to be in and shows just how irrelevant they now are. 

“Labour’s plan for a one-off tax are completely half-baked. Half of those hit by this £3.7 billion tax bill would be pensioners – for whom having a house does not necessarily mean having a high income. 

“For many of those would be hit, their ‘wealth’ could be little more than their home and pension. How is Richard Leonard expecting those pensioners to afford a one-off tax bill?

“The SNP have made serious, progressive reforms to our tax system, which see those on higher incomes paying a fairer share. Rather than more half-baked plans for Labour or reheated proposals of federalism-some-day, we should take full controls over tax and welfare in Scotland to continue to tackle inequality.”

‘Class not nationalism divides society’

Mr Leonard also attacked calls for Scottish independence, saying: “We should stop dividing people on the basis of nationality and start uniting them on the basis of class. 

“The real division in our society is not between Scotland and England, it is between those people who own the wealth and those people who through their hard work and endeavour create the wealth.  That is the real division.”

He said Labour has unfinished business on land reform. “Labour abolished feudalism in the first term of the Scottish Parliament, but twenty years later we are still living with feudal ownership, with four hundred and thirty-two private landowners still owning a half of all privately owned land in Scotland,” he said.

“And with ownership comes power. We need land justice because our earth is a common treasury.”

He said workers should have the statutory right to buy the enterprise they work in when it is put up for sale or facing closure.

“Why on earth shouldn’t the people who create the wealth own the wealth that they create? We need more planning and less market.”

He demanded a rebalancing of support given to companies investing in creating jobs.

“We will overhaul Regional Selective Assistance and reform public procurement, to support local industries and home-grown businesses, so that never again do we see factories and fabrication yards standing idle, whilst offshore wind farms in UK inshore waters paid for by public money and energy user levies are built in factories and yards overseas.”

Comment: 

Leonard’s envy politics won’t make us great again

 

Pensioners would be hit by Leonard’s tax on wealthy was originally published on Daily Business

Leonard’s envy politics won’t make us great again

Terry MurdenIn a strategy that always looked doomed to failure, Kezia Dugdale wanted Scottish Labour to fight its own corner and pursue its own agenda. Since replacing her as party leader Richard Leonard has made great strides to align his policies more closely to Jeremy Corbyn’s left wing agenda, a move that at least gives the party a semblance of unity.

Mr Leonard is the epitome of the ‘firebrand’ politician, a term most usually attributed to those on the left, perhaps because they tend to be always demanding a revolution in ideas that requires a robust style of oratory.

His combative, some would say aggressive, tone is certainly reminiscent of those soap-box orators of pre-microphone times who were forced to shout their campaign statements from street corners to make themselves heard. It also helped convince those listening that their message was important and that the speaker had conviction in what was being said.

Labour is not short of old-fashioned firebrands. John McDonnell, the shadow Chancellor, is not shy in raising the tempo, as he did in his speech at the party’s annual conference on worker rights and nationalisation. Once again it is the call to arms, an appeal to the downtrodden to man the barricades, that underpins the party’s manifesto for change.

Labour’s mantra under Mr Corbyn is “for the many, not the few”, trotted out in almost every media statement and speech. For Mr Leonard it is more than a slogan. It is a mission statement at the heart of every policy commitment, from the railways to land ownership. He is the champion of the have-nots, a spokesman for everyone denied what he believes is their right as a citizen and a human being.

Richard LeonardFew would argue with any of this, except Labour’s means to achieving this society that benefits the many not the few is not particularly appetising. In practice it would mean higher taxes, not only for the wealthiest Scots who, in all honesty, could probably afford it, but for many of those who would become unintended victims of a tax hike.

His plans to “tax the rich”, along with those of Mr McDonnell, would deter investors and drain the ambitions of even those they claim to support. The SNP has chipped in by producing evidence that half of those affected by the proposed windfall tax on the rich would be pensioners.

There are other holes in the rhetoric. On the one hand Mr Leonard dismissed nationalism and the quest of the SNP to divide Scotland from England as being irrelevant, stating that class is the real divider in Britain.

Yet, in the same speech to delegates in Liverpool he played the nationalist card himself by pledging to rebalance government grants in favour of Scottish businesses over those from inward investors, aka ‘foreigners’. This is dangerous talk and shows a failure to understand the importance of foreign investment into the economy, particularly the commercial property market which would whither without it.

Somewhere in all this bombast is a decent man fighting the good fight for social justice. It’s a commendable cause, but it won’t be achieved through envy politics, punitive taxes and denials of freedoms to those regarded by Labour as undeserving of the wealth which many of them have earned by their own endeavours.

 

Leonard’s envy politics won’t make us great again was originally published on Daily Business

Glasgow surges as Scots real estate deals top £2bn

100 Queen Street Glasgow

100 Queen Street is among the offices attracting investors to Glasgow


 

Investment into Scotland’s commercial real estate in 2018 is expected to top last year’s total of £2 billion.

Investment volumes of £1.74 billion have already ben transacted, and £265 million is currently under offer. Volumes are 90% ahead of the same point in 2017, suggesting the year will be one of the strongest recorded in terms of investment volumes in the last decade.

The data from Savills indicates that the office sector has taken the lion’s share of activity with £746 million transacted year to date (YTD).

In previous years the majority of office investment has occurred in Edinburgh but this year more than 50% of the total volume has been transacted in Glasgow with £382 million invested across 16 deals, up from £134 million at this point in 2017.

Stuart Orr, director in the investment team at Savills in Glasgow, comments: “Having lived in the shadow of Edinburgh for many years, research suggests that perhaps we’re seeing the beginning of Glasgow’s resurgence, in particular amongst UK investors who account for 60% of the office deals in Glasgow, by volume, to date. 

“Their confidence to invest is the consequence of four factors: a positive supply and demand ratio; that Glasgow has one of the lowest rental levels of the Big Six regional cities implying room for growth; rising headline rents and reducing incentives are now evident; and most influentially, at the current prime yield of 5.25% – only 25 bases points keener than last year – Glasgow offers an attractive discount to Edinburgh, Manchester and Birmingham.”

In other sectors the figures show £400m has been invested in Scotland’s retail warehousing sector in 2018, up from £60m last year.

Key deals include Fort Kinnaird in Edinburgh, Almondvale South in Livingston and Caledonian Retail Park in Wishaw. 

There have been only four high street retail deals across Scotland in 2018, totalling less than £57 million, of which three have been on Buchanan Street, Glasgow. Growing appetite for alternative assets has seen £300m traded, says Savills, including the Waldorf Astoria and Jury’s Inn both in Edinburgh. 

The firm says enthusiasm for Scotland’s industrial assets remains strong, yet while over £230m of deals have completed across 25 transactions, volumes are hampered by a lack of stock on the market. A lack of supply sees yields continue to harden, now standing at 5.75%. 

Style mile deal

Lothbury Investment Management, on behalf of Lothbury Property Trust, has sold 78-90 Buchanan Street and 9-17 Exchange Place, Glasgow for £31 million. The purchaser is Pontegadea.

The building is currently fully occupied and let to Vodafone, Lush and Starbucks on the ground floor. The first, second and third floors, comprising 16,644 sq ft of Grade A office space, are occupied by Building Design Partnerships, BNP Paribas Real Estate and Drum Property Group.

CBRE acted for Lothbury; Sheridan Property Consultants acted for Pontegadea.

It produces annual rental income of £1.3m and the sale represents an initial yield of 3.99%.

The building was purchased out of administration in 2013 for £17.42m.

Vodafone Buchanan Street

Buchanan St premises have provided good rental growth


 

Mike Toft, senior fund manager and executive director of Lothbury Investment Management, said: “Buchanan Street has been one of Lothbury Property Trust’s top performing assets since we purchased it in 2013.

“Rental growth has remained good despite the downturn in retail, with rents rising from £260 to £320 per sq ft ITZA in just three years.

“However, with the challenges now facing the retail sector, this was a good opportunity to sell and reinvest in other areas, particularly the industrial and alternative sectors.

“The disposal is in line with our strategy of selectively reducing the fund’s exposure to high street retail.”

 

Glasgow surges as Scots real estate deals top £2bn was originally published on Daily Business

Biggest gas discovery in North Sea for 10 years

Deirdre Michie

Deirdre Michie: major discovery


 

Energy company Total has announced a major gas discovery off Shetland which has been hailed as the biggest for 10 years.

Initial tests at a site on the Glendronach prospect indicated that it could contain one trillion cubic feet of gas.

Total has a 60% stake in the site. Energy company SSE and chemicals firm Ineos each have a 20% interest.

The announcement came amid further positive news for the sector at the oil price hit a four-year high.

Arnaud Breuillac, Total’s president of exploration and production, said: “Glendronach is a significant discovery for Total which gives us access to additional gas resources in one of our core areas and validates our exploration strategy.

“Located on an emerging play of the prolific west of Shetland area, the discovery can be commercialised quickly and at low cost.”

The Greater Laggan area is about 125km (78 miles) north west of Shetland.

Global energy consultancy Wood Mackenzie said it was the largest conventional gas discovery in UK waters since Culzean in 2008.

Deirdre Michie, industry body Oil and Gas UK’s chief executive, said: “This is a major discovery by Total which demonstrates the exciting potential the West of Shetland frontier region holds.”

Oil price surges

Tue, Sep 25: Brent crude – the benchmark oil price – is now trading at its highest for four years and could reach $90 a barrel by Christmas, according to some analysts.

Oil held onto gains overnight with Brent crude up 0.30% at $81.44 a barrel while West Texas Intermediate rose 0.22% to $72.24.

Opec and non-Opec members, including Russia, decided not to increase oil output at a meeting at the weekend despite calls from US President Donald Trump to lower prices.

Also, US sanctions against Iran – one of Opec’s largest producers, are due to come into force in November.

Biggest gas discovery in North Sea for 10 years was originally published on Daily Business