Deal Review - Property and Construction
Download the full deal review report (PDF - 822kb)
No one working in the property sector needs to be told that conditions have been tough. They are likely to stay that way for some time as the UK economy struggles to recover from the multiple shocks of the credit squeeze, an over leveraged consumer and an increasingly over leveraged state with all that entails for taxation and public spending for perhaps a generation to come.
Indeed, aside from banking, no other industry has been hit as hard by the changed economic climate. Property prices, both commercial and residential, fell quickly with the commercial sector particularly hard hit. High streets are littered with temporary traders or empty units further blighting surrounding property values and trading conditions. Empty spaces are becoming a more frequent sight fuelled by the abolition of empty rates relief. And with banks charging more for a smaller pool of available debt, there have been few buyers to support prices and activity.
It’s a gloomy picture, exacerbated by the fact that a great many property companies are now burdened with operational structures that were designed for happier times. As a result they are grappling with both the realities of a depressed market and their own excessive costs.
However, amidst all the gloom there are glimmers of light. It would be wrong to suggest that we’ve seen activity freeze over completely. Property prices (residential and commercial) have shown signs of stabilising in recent months. While debt is harder to come by, banks are still prepared to lend, albeit at higher cost and lower debt to value ratios. Finance is also available from a number of specialist funds set up to invest in distressed debt or distressed property.
So what does the immediate future hold? We would expect property based businesses to continue to take steps to reduce costs and improve cash flow in the months ahead. But cost control will become more selective with an eye on retaining the ability to benefit from the upturn. The key theme over the next few months is likely to be consolidation as businesses move to strengthen their position in the market ahead of an anticipated recovery.
Baker Tilly’s experience in working with property companies makes us well placed to help you face the challenges of a much altered marketplace. In the following pages we showcase just a handful of our property deals and you can see what our clients have to say about the work done by our talented people. Whether it was a trade sale, buy-out, acquisition or IPO, they all have one thing in common. Deals were delivered and delivered effectively by the Baker Tilly team.
We hope that this review will illustrate the excellent service offered to shareholders, management teams and financial institutions by our specialist team of deal doers and advisers and we look forward to providing further help in these undoubtedly difficult times. We would also like to thank everyone who has helped make these transactions happen and we look forward to working together over the coming months and years in what is, if nothing else, an exciting market!
Download the full deal review report (PDF - 822kb)
Download accessible version of report (51kb)