For most property companies, 2016/17 proved to be a slow year with unease and uncertainty following the Brexit 'out' vote in June 2016. Caxtons was no exception to this.
However, for Caxtons, one of the largest independent firms of property consultants in Kent, Medway and across the South East, 2017/18 proved to be an exceptionally good year – in fact the best year ever.
Caxtons is a property company that embraces many diverse aspects of the sector, including residential and student lettings, commercial lettings and sales and all facets of professional property services, and we always factor in that some departments will outperform others. However last year, thanks to a pretty buoyant commercial market, most departments performed really well. That performance spanned Commercial Agency, Insurance and Professional Services in particular.
To demonstrate this, profit, as a percentage of turnover, increased by in excess of 116% on the previous year. A testament to the hard work of our 100 staff members located in offices across Kent.
But we are not complacent and have no doubt that 2018/19 will be challenging and with many 'unknowns'.
Neil Chatterton, Managing Director said "Some of the known issues that will impact us in the coming year include the impending tenant fee ban that will affect our residential lettings and management departments, DE (Depart Europe) Day on 31st March 2019 and the threat of another potential interest rate increase. But we know that there will be other trials ahead.
"Property is repeatedly affected by economic uncertainty and change and this often, if not always, presents externally as a downturn in activity and internally as a lack of professionals training and entering the sector at graduate level. Inevitably both impact on businesses like ours. An extreme example of the shortage of talent is with building surveyors, where the industry in general is suffering greatly from a lack of experienced surveyors as well as new entrants to the property sector - and Caxtons is not exempt.
"So, in order to thrive we must continue to provide an excellent service to our clients, make ourselves even more attractive as an employer, and nurture our staff whilst paying attention to their personal development."
Neil Chatterton, Managing Director
At a time when it forecasts 418 rivals are losing money and 386 likely to fail, *The Plimsoll Analysis has recently identified Caxtons as one of the 100 fastest growing companies in the Estate Agents category.
In addition, it reveals 225 key rivals are ripe for takeover.
Graham Mitchell, Financial Director of Caxtons says "It is encouraging that we are rated strong and generally are performing well based upon both the key benchmarks and key trends that Plimsoll base their analysis upon."
*The Plimsoll Analysis examines markets and provides companies with information to compare themselves to others in their field, to review potential acquisition opportunities, to keep abreast of companies that threaten or are likely to fail and to identify competitors who outperform others.
Lunch provides opportunity for discussion
Property specialists Caxtons Chartered Surveyors, audit, tax and advisory firm Crowe Clark Whitehill and Brachers law firm recently held a joint Property Outlook lunch for invited movers and shakers across Kent and the South East.
Developers, house builders, bankers, construction companies and other property people came together at Eastwell Manor to hear speakers Peter Bill, and Mark Kibblewhite share their thoughts and intelligence on the sector.
Peter Bill, the respected author and property journalist for the Evening Standard, Property Week, Estates Gazette and Building Magazine spoke first.
Giving a sometimes-controversial speech Peter included a macro view of the property sector, the impact of Brexit, and focused on the outlook for Kent.
He spoke of a shifting attitude towards office occupation noting a gravitation towards serviced offices - strongly affected by a new wave of IT - and predicted that it might not be long before 30% of all offices are serviced space.
On the industrial sector he bemoaned the lack of warehouses –particularly in Kent, and believes an emerging joined-up push on re-invigorating high streets was evident in the retail sector, with permitted development rights aiding change of use and residential playing a bigger role.
He asked why house builders did not build more quickly but got short shrift from one quality house builder who said firms the size of his build to supply market demand rather than to leave properties empty for months on end. He said house builders were not there to solve the housing crisis.
Peter said the government's property ambitions to secure long-term sustainable development for commercial and residential sectors had ensured considerable government help for Kent with little return on investment. He flagged a step change in policy due in May, with further planned Civil Service de-centralisation and 200 mini-hubs being created across the country that would present opportunities.
He said the Kent Property Market Report was 'filled with gems', and that the county was doing OK with lots of activity across the entire property sector.
The second speaker, Mark Kibblewhite, is a non-executive director at Invest and Fund, a peer-to-peer platform helping individuals, high net worth lenders, institutions and others achieve risk-adjusted returns from residential development projects.
(l to r) Andrew Metcalf, event facilitator, Ron Roser, Chairman Caxtons, Mark Kibblewhite, Invest and Fund, Peter Bill, speaker, Allis Beasley Brachers, Simon Crookston, Crowe Clark Whitehill
Mark said the clearing banks had moved away from financing smaller property loans for reasons of capital values, perceived and actual delivery problems/delays, lack of expertise and past 'over exposure' to property and that in their place, the challenger banks, credit funds, institutional lenders, listed funds and peer-to-peer lenders were now occupying the territory.
He touched on what interested and convinced the new lender categories to facilitate particular projects and looked at what might be a financeable project and why – notwithstanding planning risks/gains.
Mark was clear that collectively, the availability of capital, particularly for house building but also other property, is vast. If a firm seeking funding is experienced, then there is a wide range of alternatives – especially with an attractive proposal on the table. Preparation is key, as is finding the right funding match.
In answer to a question about whether Kent would be better served by large or small scale development delivery, one house builder said smaller developers build between 20 and 30 quality properties per site and can contribute a lot to the landscape. He agreed government had done a great deal. Help to Buy had been a success for them, assisted people to get on the housing ladder and stimulated the market.
There was agreement that delays in the building industry could often be attributed to the knock on effect of problems such as timely installation of broadband, water and energy to new developments, and the insufficient number and calibre of Local Authority planners.
Locate in Kent's Chris Broom said that there was ample demand but a distinct lack of commercial development across Kent, especially large warehouses in north Kent. He noted some new build under way, including some by district councils who want to fill a gap locally, and that business rate retention by councils had helped with the latter.
In conclusion, the audience was positive and vocal about Kent's property market – especially house builders who confirmed residential property sales have increased. But there is a distinct lack of commercial stock.
Auctioneer Clive Emson said 85% of all lots presented for sale are sold and there are plenty of potential buyers around, but he wants more property to sell.
Neil Chatterton, MD at Caxtons who specialises in commercial property, in particular management, professional and investment work, said he was encouraged others agreed Kent was well positioned to take advantage of a mostly positive outlook for the sector.
"The speakers gave our guests intelligence and opinion that will have left many feeling better equipped to make decisions in relation to property – whether disposal, acquisition, expansion or contraction. Hopefully, the forum will have given them the chance to renew acquaintances with those they have worked with successfully in the past and to meet people they feel they could do business with in future.
"It's an exciting time and place to be involved in property and at Caxtons, we hope to make the best of all the opportunities presented. Including Brexit."