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Occupier demand for commercial property in Wales rises for first time in two years

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OCCUPIER demand for commercial property in Wales rose for the first time in almost two years according to the latest Royal Institution of Chartered Surveyors (RICS) Commercial Property Monitor, as demand for industrial space remained strong and demand for retail space turned positive for the first time since well before the pandemic.

A net balance of 8% of surveyors in Wales reported that occupier demand at all-sector level had risen through Q1 2024. Broken down by subsector, demand for both industrial and retail space rose (net balances of 31% and 9% respectively), with retail having risen for the first time since 2017. A net balance of -15% of Welsh respondents reported that demand for office space had fallen.

Looking at overall investor demand, a net balance of -13% of respondents in Wales reported a fall. Whilst this balance remains in negative territory, it is an improvement on -32% in the previous quarter due to a less negative picture for retail. Looking at the subsectors, investor enquiries for industrial space fell flat, whilst both office and rental space saw declines, with net balances of -31% and -9% respectively. The later was an improvement from -47% in the previous quarter.

Regarding capital value expectations, on the three-month outlook, a net balance of 7% of respondents expect capital values to rise over the next quarter, the highest this balance has been since mid-2019. A net balance of 38% of respondents anticipate that capital values for industrial space will rise over the next three months, whilst net balances for both retail (-9%) and office (-8%) space remain more subdued. On the twelve-month picture, surveyors in Wales anticipate that capital values will fall flat over the next year.

With regard to rental expectations, a net balance of 4% of surveyors in Wales expects rents to rise over the next quarter. A net balance of 46% of Welsh respondents anticipates that rents will rise for industrial space, whilst rents for office and retail space are expected to fall (net balances of -8% and -27% respectively). On a 12-month horizon, surveyors anticipate that rents will fall at all-sector level with -5% of respondents expecting a decline.

Chris Sutton of Sutton Consulting Ltd in Cardiff commented: “Industrial rents continue to strengthen for Grade A new-build floorspace at St Modwen Park, Newport with £8.75 per sq. ft achieved and quoting rents now over £9.00 per sq. ft. Only three years ago, rents on the same estate were £6.50 per sq. ft. The office market continues to adapt to changing working patterns with occupiers shifting to higher quality floorspace, with a focus upon Cardiff city centre. The lack of shovel-ready employment sites along the M4 corridor is a constraint on the economy.”

Commenting on the UK picture, RICS Senior Economist, Tarrant Parsons, said: “Although sentiment remains relatively cautious regarding the near-term outlook across the UK commercial property market, the latest survey results do show some signs of recovery coming through. For one, occupier demand growth now appears to be gaining traction slightly, supported by the broader economy seemingly returning to growth following a brief recession late last year. Moreover, the prospect of interest rate cuts later this year have already led to an easing in credit conditions across the sector, marking the first such improvement in our feedback since 2021.

This should begin to support investment market activity as the year wears on, which, in turn, will likely see a more stable picture emerge for headline capital values.”

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Business

Expansion for Ashmole & Co with acquisition of Jones Ward Accountants

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CHARTERED, Certified Accountants, Ashmole & Co, are delighted to announce their expansion following the acquisition of JonesWard accountancy firm in Carmarthen.

Ashmole & Co Carmarthen has today taken over JonesWard who have closed their office in Lammas Street, Carmarthen. All JonesWard staff, including Ian Jones and James Ward, have transferred over to Ashmole & Co and will be based in the Old School, the Quay, Carmarthen.

JonesWard informed their clients that the administrative burden of running a practice had increased significantly over recent years due to the constant changing money laundering and tax regulations, software requirements and so on. Over the past 12 months it had become more challenging to maintain the level of service they had been used to providing.

Ian Jones said, “We feel Ashmole & Co share the same values as us and have the necessary expertise and resources to ensure we can continue to provide the personal touch and level of service clients have been accustomed to. Myself and James are not retiring but we will be supported by Ashmole & Co’s partners and staff from now on in their Carmarthen office.”

Ashmole & Co partners Sharon George, Carwyn Morgan and Vinal Patel will strive to ensure JonesWard clients will continue to receive the high quality of service they are used to.

Vinal Patel, Partner with Ashmole & Co said, “It is our priority to make the transition as smooth as possible with all employees of JonesWard having already transferred to Ashmole & Co and are now based in our office on the Quay in Carmarthen. We look forward to meeting our new clients and working closely with them to meet their needs in the future.”

Ashmole & Co Chartered and Certified Accountants have been established since 1897 and are one of the largest accountancies and auditing practices in south Wales, now operating from thirteen offices throughout south and west Wales including Swansea, Carmarthen, Haverfordwest and Ammanford.   

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Dragon LNG explores integration of LNG and CO2 liquefaction processes

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DRAGON LNG, based in Waterston, Milford Haven, recently announced a significant step towards sustainable energy solutions.

The company awarded a contract to Worley, global professional services company of energy, chemicals and resources experts, to conduct a comprehensive feasibility study.

The study is focussing on exploring the potential benefits of integrating LNG (Liquefied Natural Gas)
regasification and CO2 (Carbon Dioxide) liquefaction processes at Dragon LNG’s facilities. This integration holds promise for a more efficient operation, with the potential to reduce energy consumption, carbon intensity and the levelized cost of CO2 export not only at the Dragon site but also for Haven industry companies.

If feasible, the technology at Dragon would support wider collaboration with RWE Pembroke Net Zero Centre, whose CO2 would be transported to the Dragon facility for processing before being shipped via non-pipeline transport (NPT) to carbon sequestration sites.

Key aspects to be addressed in the feasibility study include:

  • Technical Solutions: Worley will evaluate various technical approaches to seamlessly integrate LNG and
  • CO2 liquefaction processes, ensuring optimal energy efficiency and effectiveness.
  • Carbon Intensity Reduction: Dragon LNG is committed to sustainability, and the study will assess how the integration of processes can contribute to lowering the carbon intensity of operations, aligning with broader environmental goals.
  • Economic Viability: Understanding the financial implications is crucial. The study will delve into the levelized cost of CO2 and other economic factors to determine the feasibility and financial benefits of the proposed integration.

Commenting on the partnership, a spokesperson for Dragon LNG stated, “We are excited to collaborate with Worley on this important initiative. As a responsible energy provider, Dragon LNG is continuously seeking innovative ways to enhance our operations while minimizing our environmental footprint. This feasibility study represents a significant step towards achieving those objectives.”

Worley’s expertise in engineering and consultancy services including in the CO2 and LNG sectors makes them an ideal partner for this endeavour. Their track record of delivering sustainability solutions aligns perfectly with the ambitious goals of Dragon LNG.

This collaboration underscores Dragon LNG’s commitment to driving sustainable practices within the energy sector. By exploring the integration of LNG regasification and CO2 liquefaction processes, the company aims to pave the way for a cleaner, more efficient energy future with their ambition of a net zero terminal by 2029.

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Business

‘Sicknote culture’: Why it’s up to employers to change the status quo

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PRIME Minister Rishi Sunak’s recent speech on Britain’s sick note culture highlights how something’s ‘gone wrong’ since Covid, an expert has warned. 

An estimated 850,000 more people are currently economically inactive according to reports. 

But Nathan Shearman, director of therapy and training at Red Umbrella and a qualified psychotherapist and counsellor, said it is a multi-faceted and complex issue to tackle.

He says: “We have known for a while that the number of people who are economically inactive has been going up. And the language around it is interesting – economically inactive suggests that you’re not contributing to the country’s economy, which misses the fact that these people in a lot of cases genuinely want to work, but simply cannot.  

“Access to services is vital. That’s where the government has a big responsibility in terms of providing the services needed. And that’s where a big part of this issue lies. For those who are off work with their mental health, the lead time to get mental health support is huge.  

“In most major cities, you’re looking at a six-month lead time for counselling and therapy through your GP. That’s potentially six months you’re going to be signed off before you can even get any help or support to start to get better. 

“We know that there have been a lot of budget cuts over the years and that mental health services are significantly underfunded as a result.  

“This means that employers can now no longer rely on the NHS to help provide the solutions if and when employees need support to get over mental ill health. 

Employers must step up to fill some of those gaps and have plans in place to help both prevent and support. 

“There are steps that workplaces should be taking to improve people’s wellbeing and reduce the number of individuals that are being signed off sick.”

Outlining what some of those steps are he continued: “Education is really important from a preventative point of view, too, because if somebody comes forward and their line manager, for instance, just doesn’t know how to respond, this could be particularly detrimental. 

“Knowing how to respond and having a basic understanding of mental health is key, as there is there’s a lot of misinformation out there, as well as often, an old-school mentality surrounding mental health issues.

“That’s where mental health training becomes vital, such as Mental Health First Aid training for line managers to teach them how to support their teams. 

“That’s also really crucial when people return to work after experiencing mental health issues. There’s often an expectation that someone is just going to come back and resume working as normal, but that’s not expected with physical health issues.  

“Having managers trained up to support individuals within their team effectively when they come back means that they’re less likely to need to be signed off again. 

“Something invaluable that comes from mental health training is knowing how to make adjustments for people who may be struggling. Sometimes it’s as simple as saying ‘if you’re feeling a bit overwhelmed, just know that you can talk to me, and I’ll help you any way I can’ or just letting them know they can take a break whenever they need to. 

“That means that employees are less likely to get to a point where they are feeling overwhelmed because they know they have options. It’s also about offering additional support such as employee assistance programmes or counselling and therapy services.  

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