2024 Business Predictions: Jonathan Morgan, partner at Zenko Properties
It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Jonathan Morgan, who is a partner at Zenko Properties, an independently owned sales and lettings agency. Jonathan shares his views about what will happen in Leeds city centre’s residential market in 2024.
In the context of the wider housing market, perhaps the single most significant trend will be the impact of the huge weight of capital which is sitting in readiness, waiting to invest in what is known as ‘Single Family Rental’. This is the suburban version of ‘build to rent’ which now dominates the skylines of most of our major city centres and is starting to appear in secondary cities.
The challenge of higher interest rates along with the end of Help-to-Buy has meant that housebuilders are increasingly turning to SFR funds as a means of propping up their targets – it seems that a shift towards longer term rental is well underway.
Leeds city centre has already seen a significant shift towards institutionally-owned apartment buildings, with multiple amenities and robust professional management. The arrival of schemes such as Mustard Wharf by L and G, New York Square by Moda and Leodis Square by Dandara, coincided with the extraordinary impact of the end of Covid period on the rental market which effectively meant that two cycles of demand bumped into each other. The net effect of this was an increase in average city centre rents to unprecedented levels. Underpinning this trend is the predominance of students from overseas, for whom the traditional affordability measures are largely irrelevant but there is plenty of evidence to suggest that local professionals also have an appetite for this new way of renting.
2024 is going to be another interesting year in Leeds city centre: the key sectors are the rental market, which is the engine room of any successful urban economic centre, the continuing upturn in the delivery of Purpose Built Student Accommodation and the proliferation of fractional sales schemes such as Springwell Gardens, Sky Gardens, Axis and Phoenix, which rely on sales to distant investors.
Sadly, there is little sign of the delivery of high-quality apartments or houses specifically aimed at owner occupiers, for which there is still huge pent up demand. This remains the area of greatest opportunity and whilst the likes of 2 Great George Street by Priestley are a step in the right direction, their sales campaign has been driven towards early off plan investor demand.
There have still only ever been a handful of sales at over £750,000 in Leeds City Centre which makes absolutely no sense in the context of the wider metropolitan area, where this sort of figure variously buys a 4-bed semi in Rawdon or Roundhay or a 3-bed end terrace in Otley. Recent sales of penthouses at 2 Great George Street for £1.3m and a new apartment listing at £1m may herald the emergence of a premium city centre market but we are a long way from the £1.95m being asked for a penthouse in the Deansgate Towers in Manchester!
It is likely that average city centre rents will increase again in 2024 and it would appear from salary data that there is still some headroom in affordability. It remains to be seen whether or not the demand for premium rental from the overseas student sector will wane and what impact this might have on occupancy levels and average rents in the BTR schemes. It is unlikely that this will be a factor in 2024, however, with research suggesting that there is still a significant lag in the provision of Purpose Built Student Accommodation.
Sales activity in the mid-market is likely to increase, particularly as more and more developments are slowly unlocked through the impact of the Building Safety Fund. Many of these have been literally unsellable for a number of years due to cladding issues which has meant that those with average budgets have had very limited options. It is likely that many of these have turned their attention to the suburbs, putting further upward pressure on the price, for example, of small terraces in LS7 and LS4.
Add into the mix the intriguing mortgage rate war which is currently playing out and it is clear that 2024 is highly unlikely to be the year of the crash!
Yorkshire Water plans scheme to reduce storm water overflows from South Elmsall
Yorkshire Water is to build an integrated wetland at its South Elmsall wastewater treatment works to help reduce storm overflow discharges into Frickley Beck – a tributary of the river Don.
The wetland is a nature-based solution designed to treat storm flows during heavy and prolonged rainfall, and will take two years to build – a task being taken on by Eric Wright Water
An area as big as five football pitches will be built and planted with more then 220,000 plants, which will treat the storm water as it travels through the wetland.
Pollutants and nutrients will be naturally broken down and taken up by the plants and bacteria within the wetland. The wastewater will not include solid waste.
As well as providing a sustainable and energy-efficient way of treating the water, the wetland will also increase biodiversity in the area and attract a range of wildlife including bees and other pollinators, breeding birds, amphibians and reptiles.
Simon Hudson, lead project manager at Yorkshire Water, said: “This is an exciting project and as we’ve seen with Yorkshire Water’s Clifton wastewater treatment works, these wetlands provide a range of benefits not only the way we treat wastewater, but also for the local environment.
“We want to naturally treat the storm water at South Elmsall, reducing the reliance of energy-heavy treatment processes, providing a sustainable way to remove pollutants and reducing storm overflows into the beck, while creating wildlife diversity and achieving a biodiversity net gain.
“The customers who attended the recent drop-in session were supportive of our plans and we look forward to delivering this project for the benefit of Yorkshire’s environment.”
Professional services group records “resilient” first half financial performance
Gateley, the professional services group, has hailed a “resilient” first half financial performance, with revenue and profits on the rise against a challenging macro-economic backdrop.
According to unaudited results for the six months ended 31 October 2023, revenue was up 7.6% at £82m, growing from £76.1m in the same period of the year prior.
Group profit before tax meanwhile reached £7.4m, increasing from £6.3m.Rod Waldie, Chief Executive Officer of Gateley, said: “Given macro-economic conditions during the period, I am pleased with the Group’s resilient H1 24 performance.
“This is testament to, firstly, our strong client relationships, sustained by the excellent service delivered by our people and, secondly, our strategy working in practice as we continue to differentiate Gateley and enhance resilience via the aggregation of, and continued investment in, complementary legal and consultancy services on each of our Platforms.
“Our H2 24 outlook reflects our cautious view on the market conditions we are currently experiencing. That said, I am confident in the ability of our excellent teams to continue to rise to the challenge for the remainder of this year, and beyond. We continue to invest in the business and remain confident and well-positioned to deliver our long-term ambitions.”
Multi-million pound Bridlington investment could create 200 new jobs
Investment of £3.7m investment to modernise and transform the fortunes of Bridlington Business Park could create 200 east coast jobs.
Bought by Manchester-based MCR Property Group in November 2021, a significant part of the development on Bessingby Way is being modernised to meet the demands of local occupiers. The capital investment programme is transforming the northern part of the site that had been mothballed and left derelict by previous owners. 22 new units will be created providing modern industrial, storage and trade counter units ranging in size from 1,000 to 15,000sqft. Ahead of the official opening in a few weeks, three pre-lettings have already been agreed and viewings are now welcomed for the remaining available units, which are being marketed by PPH Commercial, the Hull-based chartered surveyors and commercial property consultants together with MCR Property Group’s internal lettings team. Charles Denby, Asset Manager at MCR, said: “There is a real lack of good-quality industrial units in the Bridlington area and we have invested heavily because we are confident in the scheme we are providing and the region’s economy. “We have worked hard to improve the units which were vacant so that we can bring valuable industrial space back to the market. The refurbishment works are well underway and progressing at a very fast pace which is testament to the approach we take on all our projects as an active investor and landlord.”Secretary of State gives green light to Drax carbon capture plans
The Drax Bioenergy with Carbon Capture and Storage Project application has been granted development consent by the Secretary of State for Energy Security and Net Zero.
The project proposes to capture carbon dioxide emissions from at least one and possibly two of the existing biomass units at Drax Power Station near Selby.
Planning Inspectorate Chief Exec Paul Morrison said: “The Planning Inspectorate has now examined more than 100 nationally significant infrastructure projects since the Planning Act 2008 process was introduced, ensuring local communities have had the opportunity of being involved in the examination of projects that may affect them.
“Local communities continue to be given the opportunity of being involved in the examination of projects that may affect them. Local people, the local authority and other Interested Parties were able to participate in this six-month Examination.
“The Examining Authority listened and gave full consideration to all local views and the evidence gathered during the Examination before making its recommendation to the Secretary of State.”
Brisant-Secure acquires Deseo Locking Systems
Dewsbury-based Brisant-Secure has acquired the business and intellectual property of Deseo Locking Systems Limited for an undisclosed sum.
Deseo, based in Braintree, is an innovative trailblazer with critical security patents to its name.
Deseo Locking Systems’ Marcus and Mark O’Sullivan stay on with the business, and Mark joins the Brisant-Secure board as Deseo director.
“We are delighted by this, our first Brisant-Secure acquisition, and excited to welcome Mark and Marcus, both successful innovators,” says Brisant CEO Nick Dutton.
“Following the growth of our award winning, smart security range, including Ultion Nuki, Ultion Bolt and more recently our Ultion window handle range, this is a major step on the road to future proofing home security. And it’s a significant development in the evolution of Brisant as a hardware house.”
Deseo’s MD, Mark O’Sullivan, says: “I don’t think Deseo Locking Systems could have found a better home with the coming together of two strong innovative cultures. Brisant will be an active partner with the resources and the mindset to help us develop the Deseo products and achieve the full potential of Deseo and Brisant-Secure.
“In my new role as Deseo director for Brisant-Secure, the opportunities for synergy and growth are particularly exciting.”
TV’s champion baker helps Nuclear AMRC raise more than £25,000 for Macmillan
A marathon baking session by Great British Bake-Off champ Rahul Mandal has helped the South Yorkshire-based Nuclear AMRC to raise more than £25,000 for Macmillan Cancer Support in 2023.
The centre committed to the £25,000 target in February 2023, with serious fundraising only beginning in the spring.
Nuclear AMRC staff took on a string of individual and team challenges throughout the year, culminating in a festive baking contest with colleagues from across the High Value Manufacturing Catapult network.
Along with an individual challenge by business development manager Neil Murray to squat-lift more than 50 tonnes through December, the bake-off brought the total raised (including Gift Aid) to £25,051.
That total can pay for a Macmillan nurse for 735 hours (equivalent to 21 weeks) to help people living with cancer and their families to receive essential medical, practical and emotional support.
Michaela Ryder, senior fundraising manager for Macmillan in Yorkshire, said: “We were absolutely blown away by the support, passion and commitment shown by the whole Nuclear AMRC team last year.
“To say this is the first year Nuclear AMRC have partnered with a charity in this way is just astounding, and to have raised such a huge amount in such a short space of time is a real testament to all the staff involved. Everyone has really got behind the partnership, and we have loved seeing the different fundraising ideas and challenges been taken on by staff to smash their target.
“The money raised will make such a huge difference, so on behalf of everyone at Macmillan and all those people affected by cancer who will be supported by their fundraising, I want to say a huge thank you. It has been a pleasure to work with the team, and we can’t wait to see what we can achieve together in 2024.”
Other challenges completed by staff include a marathon baking session by research associate and celebrity baker Dr Rahul Mandal for a staff coffee morning; a 40-mile hike through Cumbria for members of the executive team; and a host of sporting endeavours including bike rides, skydiving, press-ups and 10km runs.
Delegates at the Nuclear Manufacturing Summit, hosted by the Nuclear AMRC in October, gave more than £9,200 in donations and a silent auction.
Fundraising will continue through 2024, with CEO Andrew Storer and business support analyst Isobel Storer preparing for the London Marathon to support Macmillan.
Mr Storer said: “Through close and personal interaction with the sort of care that MacMillan provide, I wanted to try and raise much-needed money. When discussing with the team, we realised how lucky we all are and, with a little bit of effort, that we could try and do our bit. Then we set a target, which we had no idea how to achieve.
“Apart from the money raised and a lot of fun along the way, it really brought the different parts of the Nuclear AMRC and the Catapult together. Its great that we can put in context what £25,000 will do for Macmillan – that is what has spurred us on to continue our fundraising in 2024.
“Thank you to all those that helped to make this happen – those people that challenged themselves to raise money, and those across the nuclear sector who showed their generosity.”
Surprise rise in inflation
Annualised inflation increased to 4% in December, up from 3.9% in November, in contrast to a larger than expected drop in the month prior.
Measured by the Consumer Prices Index (CPI), this uptick was primarily driven by rises in the price of cigarettes and alcohol and defied forecasts for annualised inflation to come in at 3.8%.
Meanwhile, core inflation, which takes out volatile factors like energy, food, alcohol and tobacco to give a clear picture of underlying trends, stood at 5.1% in the 12 months to December 2023, the same as in November.
Alpesh Paleja, CBI lead economist, said: “Today’s inflation figures show it isn’t ‘job done’, despite coming after last month’s sharper-than-expected fall. Indeed, risks to the inflation outlook remain very much to the upside.
“In the near-term, Ofgem’s lifting of the energy price cap in January will likely lead to a small bump in the CPI rate. And there are now renewed risks from tensions in the Middle East, through their potential impact on supply chains and commodity prices.
“Notwithstanding signs of a moderation in wage growth, the Bank of England will also be watching for more persistent cooling of domestic price pressures, in order to be more reassured about the inflation outlook. So, while all eyes are focusing on the timing of cuts to interest rates, it may still prove soon to start reducing the cost of borrowing.”
Start strong in 2024 with Business Lincolnshire’s support
Business Lincolnshire is here to assist and guide entrepreneurs in Greater Lincolnshire and Rutland through the practical steps of launching and developing a start-up business in 2024.
As we step into 2024, it’s a great time to turn your business dreams into reality. For local entrepreneurs ready to take the leap, crafting a solid business plan, securing financial support, establishing a robust marketing strategy, and ensuring legal compliance are among the crucial steps required for success. Recognising the challenges that start-ups encounter, whether you’re at the initial stages or need assistance along the way, Business Lincolnshire is available to guide start-up businesses in the region, providing essential support to help you achieve success.
Councillor Davie, Executive Councillor for Economy & Place at Lincolnshire County Council, emphasises: “2024 is a prime time for individuals to take their first steps towards starting in business. We understand the challenges of transitioning from an idea to a thriving business, and that’s why Business Lincolnshire is committed to providing the necessary fully funded support and resources.”
At the core of this support system is the Business Lincolnshire Start Up Academy. This initiative offers workshops and personalised advice for those contemplating entrepreneurship or managing early-stage businesses. Led by professional Business Start-Up Advisers, the programme serves as a supportive platform, offering insights into business plans, financial forecasting, accessing finance, mentoring, coaching, and more.
Recognising the financial challenges that often accompany business initiation, the Start-Up Academy also offers practical solutions through its Funding Your Start-Up workshops. These are designed to provide valuable insights into securing funding, whether through grants, loans, or various support schemes. Reflecting on the effectiveness of the Programme, Trish Kelly, a past participant, states: “The workshop was very informative, especially on finances. Would thoroughly recommend to others at any stage of setting up a business.”
Now is the time for aspiring entrepreneurs to act on their dreams. Business Lincolnshire is ready to provide the tools, support, and expertise needed to turn those dreams into successful businesses. For more information and to access support, please visit Business Lincolnshire’s website.
Please note: Geographical restrictions may apply to certain programmes. Interested businesses are encouraged to verify their eligibility before applying.
Planning application submitted for remodelling of Huddersfield’s Buxton House
Kirklees Council is moving forward on the plans to remodel Buxton House, a high-rise block in Huddersfield town centre. A full planning application has been submitted this January.
A dedicated council housing team has started conversations with tenants to help them find new homes. Financial help and tailored support will be provided to make moving easier before the work begins.
This comes after a well-engaged consultation was held in August 2023, allowing tenants to share their feedback on the plans for the building.
Working closely with building consultants AHR, the council has used this feedback to shape the plans. The remodelling will also save money in the long run by making the building more energy efficient.
The project will reuse the current building’s main structure but will result in major improvements to fire safety, the layout of the flats and communal spaces and the external appearance of the building, including a new entrance. It is the intention to connect the building to the proposed district heating system, helping to reduce heating costs for tenants.
Solar power features are also included in the plans, showing the council’s commitment to both improving housing standards and reducing environmental impact.
Councillor Moses Crook, Cabinet Member for Housing and Highways, said: “I am delighted we are now at the stage where we have submitted a planning application for the remodelling of Buxton House, as well as starting to have conversations with our tenants on their future housing options.
“We know this might be a challenging time for our tenants, but full support will be in place throughout the project.
“The work is essential for meeting new building safety laws, improving tenant experience and also for reducing the building’s environmental impact. AHR has worked with us to include features that will save money for both the council and tenants.”
The £57 million budget for improving high-rise blocks in Kirklees comes from rent payments and is only used to upgrade and maintain council housing. The work on Buxton House is crucial for improving fire safety and keeping tenants safe.
