Gone very quiet

[r3g]

Sheepshanks said:

r3g said:

Are you saying that builders contacted you for the work after seeing your PP granted in the local rag or wherever?

I guess they monitor planning applications either online or maybe someone circulates a list of them - it’s very routine to get these mailshots, I was mainly surprised by how many builders there are around us.

Interesting. I would have thought reputable builders would have full diaries of worked booked months in advance already through word of mouth without having time to go looking on planning application approvals to tout for work they don't need.

[Digga]

r3g said:

Sheepshanks said:

r3g said:

Are you saying that builders contacted you for the work after seeing your PP granted in the local rag or wherever?

I guess they monitor planning applications either online or maybe someone circulates a list of them - it’s very routine to get these mailshots, I was mainly surprised by how many builders there are around us.

Interesting. I would have thought reputable builders would have full diaries of worked booked months in advance already through word of mouth without having time to go looking on planning application approvals to tout for work they don't need.

Have a look at uk house building stats. We’re building fewer than in 1978 and subcontractors, some very large have gone bust. There are more construction related businesses closers in the last 18 months than following the GFC.

Follow this guy on X to get the unbiased stats and data: https://x.com/noblefrancis?s=21&t=Mtn7p1RkhZc2...

Edited by Digga on Saturday 25th May 09:31

[Terminator X]

TownIdiot said:

How are people in the building trade finding it?

I've got a couple of plots of land for development and build costs are sky high.

Are you getting work or are the costs killing projects?

I'm a QS. Quiet Jan to Mar but seems to have picked right up again since then. Very busy.

TX.

[Dr Interceptor]

r3g said:

Sheepshanks said:

r3g said:

Are you saying that builders contacted you for the work after seeing your PP granted in the local rag or wherever?

I guess they monitor planning applications either online or maybe someone circulates a list of them - it’s very routine to get these mailshots, I was mainly surprised by how many builders there are around us.

Interesting. I would have thought reputable builders would have full diaries of worked booked months in advance already through word of mouth without having time to go looking on planning application approvals to tout for work they don't need.

It's quite common practice... You can download a list of planning applications through your local planning portal. Someone I know has a kitchen company and does this looking for extensions, on the basis that most extensions include a new kitchen.

[22]

Some of the 'known' local builders have marketing and lead-generating people. Although the biggest local brand near me has packed up in the last year.

Not quite the same, but I was looking into building a ~16 acre lake on a 40 acre plot. Would need 110k cubic metres of muck brought in. I'd only got as far as getting surveys, speaking to highways (for lorry movements, agreed 50 a day - although nice at several hundred £ a tip) and a couple of specialist consultants. Nothing was firm but I started getting emails and calls from the big brands you see working on the M25/HS2. Would be a small project for them, but imagine they give a drink to people who feed them information. They were all super keen for it (obviously having somewhere they can dump muck is valuable).

At work we're on an industrial estate and other businesses that I know bits of (lots of others I don't)...
1. Clothing manufacturers for police/armed forces - flat out. Ukraine has been great for them.
2. Asbestos removal - flat out although big retainers from rail/tube/prisons etc.
3. Solar - just bought a load of new vans and taking on 40 more staff so looks ok.
4. Kitchen builders and fitters x 2. Both busy but say they have to work harder to convert leads.
5. Car garage. Say they're busy but I can seemingly (online) book any MOT slot for pretty much any day next week.

[HoHoHo]

MaxFromage said:

skwdenyer said:

Around here (Yorkshire Dales), there's a whole new development of units at just over £6 psf pa that have been empty for over a year now. Near where my building in East London is, there are units that have been empty and to let for similar periods of longer.

I picked up in this in my area- West Mids the other day. It used to be impossible to get them.

I own several units and I’ve got one that has now been unoccupied for 6 months (SE UK). The agent is at a loss why it’s still empty, it’s a really nice 1200sqft office and there just no takers, the market is dead.

[Digga]

HoHoHo said:

I own several units and I’ve got one that has now been unoccupied for 6 months (SE UK). The agent is at a loss why it’s still empty, it’s a really nice 1200sqft office and there just no takers, the market is dead.

Why would anyone risk capital setting up a business in the present tax and economic environment?

Seriously. Continuing an established business is another matter, but IMHO risk/reward for entrepreneurship is at a 40 year low in. The UK.

[TownIdiot]

HoHoHo said:

I own several units and I’ve got one that has now been unoccupied for 6 months (SE UK). The agent is at a loss why it’s still empty, it’s a really nice 1200sqft office and there just no takers, the market is dead.

I am about to be in the same boat.

Got c.4000 sq ft about to be empty and there are already two similar properties nearby that have been empty for quite some time.

It will probably be converted to residential, but only after a fairly protracted process as it doesn't qualify for prior approval

[r3g]

HoHoHo said:

I own several units and I’ve got one that has now been unoccupied for 6 months (SE UK). The agent is at a loss why it’s still empty, it’s a really nice 1200sqft office and there just no takers, the market is dead.

Is the SE differen to the rest of the country for such things? Up here in the north (W Yorks) there are literally thousands of empty office units for rent and have been for many years. I expect the the inventory will continue to grow too, with the increase in WFH and their refusal to reduce the rents to a sensible level.

[breadvan]

Digga said:

HoHoHo said:

I own several units and I’ve got one that has now been unoccupied for 6 months (SE UK). The agent is at a loss why it’s still empty, it’s a really nice 1200sqft office and there just no takers, the market is dead.

Why would anyone risk capital setting up a business in the present tax and economic environment?

Seriously. Continuing an established business is another matter, but IMHO risk/reward for entrepreneurship is at a 40 year low in. The UK.

Just set up my latest recruitment business. Usually, I'd be looking for exactly that sort of space.

This time however, it's entirely WFH, with the entire Cap-Ex being used for our tech stack rather than space.

[sagarich]

breadvan said:

Just set up my latest recruitment business. Usually, I'd be looking for exactly that sort of space.

This time however, it's entirely WFH, with the entire Cap-Ex being used for our tech stack rather than space.

What sector is the new recruitment business in Breadvan?

[breadvan]

sagarich said:

breadvan said:

Just set up my latest recruitment business. Usually, I'd be looking for exactly that sort of space.

This time however, it's entirely WFH, with the entire Cap-Ex being used for our tech stack rather than space.

What sector is the new recruitment business in Breadvan?

Healthcare, you in the game?

[Tim Cognito]

breadvan said:

Just set up my latest recruitment business. Usually, I'd be looking for exactly that sort of space.

This time however, it's entirely WFH, with the entire Cap-Ex being used for our tech stack rather than space.

Makes sense to me, we had a 25 seat office pre COVID. Now have a 6 seat one due to WFH. Must be thousands of businesses in the same situation either ditched the office entirely or much scaled back for hybrid working.

[GardeningEcomm]

Interesting reading recent comments on commercial property on this thread.
Thought I'd chip in with my experience.

We're based in the NE.
During Covid we were going gangbusters - as were many online businesses - ideally we wanted more storage space.
There was nothing available - zero, zilch, nada. We looked extensively for 18months in 20/21 to no avail.

Due to lack of supply we looked into commissioning a new warehouse build.
Was quoted £4.5m for a 50,000sqf shed (£90sqf, roughly £9sqm).
This was April 2021.
Was pleased we didn't go ahead with this project as material costs then went through the roof....I imagine final build cost would have ended up a lot higher?

Been in touch this week with an old developer contact made when we were searching.
Not in market for a build now but asked about cost to buy.
Price now being quoted is £125sqf (£6.25m for 50,000sqf)
So a near +40% increase in 3 years.
(pretty standard 'box' fit-out - 10% office space, 10m eaves height)

Lease costs back in April 21 we were looking at £5.75-£6.00sqf for a new build but we had to commit to a 20yr lease.
This has jumped to around £8.50sqf. now I'd estimate?
(Looks like typical rental yield in 21 was about 10%? Maybe higher interest rates has driven yield targets higher?)

Since these '21 cost quotes the bottom has fell out of the online consumer market (for us anyway)
Our rates bill is up by +31% (commercially not ideal- but us online businesses have had too big an advantage for too long I guess).
But other costs have also raced ahead:
eg, salaries up +20%, energy costs doubled, online ad costs +50% and ocean freight now back up to $8000/container.
The 'numbers' simply aren't making commercial sense anymore.
Not moaning BTW - just fascinated how quickly things have changed.

The market will level out - as it always does - but it does feel like these big cost/demand changes still need to pass through.

[Phooey]

22 said:

4. Kitchen builders and fitters x 2. Both busy but say they have to work harder to convert leads.

I've been chatting to a few (handmade) kitchen companies recently wrt our extension plans and I get the feeling none of them seem like they are in need of work. As I mentioned above - the architect and the appropriate trades he regularly uses are very busy.

Horseboxes - bit niche and not your average transport but are still selling at massively inflated prices to pre-Covid. So in some sectors / areas / supplies etc there's still enough demand to create a healthy market.

[DSLiverpool]

My Amazon (no stock no marketing) project still going strong. For transparency I’ve no interest in this now apart from working on none Amazon channels and 3pl with them. Remember no stock.

It’s household, DIY and generally low to medium order value.

I’d love to explain on a free group zoom to anyone interested but PH might see it as advertising (it’s not)

Edited by DSLiverpool on Saturday 25th May 20:13

[sjc]

Window blind manufacturing business here,to the trade and commercial sectors (generally). In 36 years I have never known it so quiet. Each time we think it can’t get worse .. it seems to!

[Digga]

GardeningEcomm said:

Interesting reading recent comments on commercial property on this thread.
Thought I'd chip in with my experience.

We're based in the NE.
During Covid we were going gangbusters - as were many online businesses - ideally we wanted more storage space.
There was nothing available - zero, zilch, nada. We looked extensively for 18months in 20/21 to no avail.

Due to lack of supply we looked into commissioning a new warehouse build.
Was quoted £4.5m for a 50,000sqf shed (£90sqf, roughly £9sqm).
This was April 2021.
Was pleased we didn't go ahead with this project as material costs then went through the roof....I imagine final build cost would have ended up a lot higher?

Been in touch this week with an old developer contact made when we were searching.
Not in market for a build now but asked about cost to buy.
Price now being quoted is £125sqf (£6.25m for 50,000sqf)
So a near +40% increase in 3 years.
(pretty standard 'box' fit-out - 10% office space, 10m eaves height)

Lease costs back in April 21 we were looking at £5.75-£6.00sqf for a new build but we had to commit to a 20yr lease.
This has jumped to around £8.50sqf. now I'd estimate?
(Looks like typical rental yield in 21 was about 10%? Maybe higher interest rates has driven yield targets higher?)

Since these '21 cost quotes the bottom has fell out of the online consumer market (for us anyway)
Our rates bill is up by +31% (commercially not ideal- but us online businesses have had too big an advantage for too long I guess).
But other costs have also raced ahead:
eg, salaries up +20%, energy costs doubled, online ad costs +50% and ocean freight now back up to $8000/container.
The 'numbers' simply aren't making commercial sense anymore.
Not moaning BTW - just fascinated how quickly things have changed.

The market will level out - as it always does - but it does feel like these big cost/demand changes still need to pass through.

Build costs are way up, due to increased specification (especially environmental efficiency etc.), high materials costs and, as you pint out, higher wage costs.

Agree with what you costs have yet to be fully passed on and are just one reason why I think it’s not a great time to start a capital intensive business.

[POORCARDEALER]

Currently doing a new build (west yorks), cost of everything seems astronomical - materials, trades etc - fully understand why new build houses are so expensive now

[Sheepshanks]

r3g said:

Interesting. I would have thought reputable builders would have full diaries of worked booked months in advance already through word of mouth without having time to go looking on planning application approvals to tout for work they don't need.

They do, but anyone in business knows that if the pipeline starts to dry up it can be difficult to get it moving again.

Also, not all builders are one/two man firms that can only do one job at a time - the one we used had 15 core employees but those employees basically acted as working supervisors for contractors, so they’re running a few jobs in parallel. When things were going mental post-COVID they were able to start our job 2.5 mths after we approached them.

The known local micro firms that I approached all seemed to be on one job and had the next booked in so were tied up for 9mths+.