Property & Construction Forum hears of glimmers of hope in a ’sea of debt’
PROPERTY AND CONSTRUCTION FORUM HEARS OF GLIMMERS OF HOPE IN ‘A SEA OF DEBT’
Staying positive and looking out for opportunities were the key messages at a forum held to discuss the economic situation being faced by the property and construction industry.
At last month’s Forum, guest speaker Nick Parsons, head of markets strategy at nabCapital, told the East Midlands Property and Construction Forum, sponsored by PKF, Freeth Cartwright and The Wilson Organisation that the UK economy “had been floating on a sea of debt for the last 10 years” and that it was now going to “sink”.
But he told delegates: “Businesses should resist temptations and ride out the next 12 months to take advantage of expanding in the predicted economic upturn in 2010. The key is to run your business for survival.”
The forum, an annual event on the business calendar of the East Midlands, was held to examine some of the issues facing the sectors and offer advice to delegates.
Chris Holwell, construction procurement specialist with solicitors Freeth Cartwright LLP, noted that the construction sector was looking to the Building Schools for the Future programme, the Olympics and other major public infrastructure projects to fill some of the gaps left by the cessation of so much normal commercial activity.
Chris pointed out that conditions were good for the public sector to obtain keen prices for land acquisition and construction and that public sector bodies with plans for development or refurbishment projects were unlikely to find a better time than now.
Chris added: “Many housing associations are already taking advantage of the opportunities to get more for their money. Although the private sector may have to swallow hard at the prices it has to offer, those who can give the public sector what it wants will be significantly better placed for survival than their rivals.”
Fraser Goodall, a tax partner at accountants and business advisers PKF, said that there were measures that could be taken that could initiate the process of recovery - bringing about an earlier than expected bottom out in commercial property values.
Fraser said: “The tax environment is such that local property businesses would welcome initiatives to alleviate the fall in demand and kick-start the market again. The economic climate is creating financial problems for the sector and adding to the atmosphere of pessimism.
And he added: “The predicament it faces is how the sector can minimise the risk of the downturn and capitalise on any opportunities for growth which are likely to be there if bold steps are taken.”
Wilsons, the Nottingham insurance company which specialises in commercial property, has seen an increase in activity from part of the industry.
Charlotte Prow, joint managing director, commented: “Although the general feeling is low, it is clear that the smart businesses are the ones who are confident and looking to grasp the opportunities that really are out there.”
A poll held during the event revealed that delegates generally believed the only way to halt the continuing slide in prices would be widespread Government intervention within the business tax environment - to attract investors with capital back into the market.
They also called for a fall in business rates and the introduction of tax cuts and incentives such as the abolition of the empty property tax.
ends - 25 November 2008