Budget Q&A with Tony Skelton

At a business forum recently Tony Skelton, as a long-standing member of the Kent business community, was asked to give his views on the economic outlook following this first coalition budget.

Tony, what’s your immediate reaction to the 2010 coalition budget?

When you’re in the business of renting property to other businesses, as we are, you are directly affected by how well the business market as a whole is doing. And at Stour Valley Estates we have felt the effects of the downturn, with fewer enquiries over the past months for leasing from businesses starting or expanding. First reactions to the budget from the new Government are that there are some small gains, for example they have extended the moratorium on empty property business rates, the continued low bank interest rates help and going forward lower corporation tax for some businesses but it’s clear that we will continue to need to tighten our belts for the next few years.

Does that mean recovery is some way off?

Managing commercial property is all about the long term, so while we may be talking years rather than months for a full recovery, we are confident that it is on the way and that we can make the most of any opportunities, rising to the challenges that the economy puts in our path. Having been in the property business in East Kent for more than 35 years, and with some tenants going back more than 20 years, we believe the market is now ready to turn the corner, albeit slowly.

What do you think the budget impact will be for commercial property landlords like yourself?

On the upside, if confidence and growth are slow to return, leasing is a good option for businesses looking to start up or expand in a difficult market as it avoids tying up capital in uncertain investments. This puts landlords in a good position. The prospective tenant is also in a strong position, however, as they can drive very competitive deals from landlords who want to utilise all their stock and avoid overhead costs of utility bills, empty property business rates and maintenance charges. The key thing is that we keep moving forward as stagnation helps no-one.

What makes you think the market is ‘ready to turn the corner?’

We can see a number of signs of recovery at Stour Valley Estates. Our sister company and tenant, Skeltons, have a growing order book for construction and highway maintenance. And the quality of the enquiries from our website for our retail and industrial portfolio has definitely improved, which means that the business market is picking up. We have also seen this with a number of new lettings. At CT3 Business Park we have let 7886 ft new warehousing accommodation, 4600 sq ft of secure storage space, and a 2300 sq ft of additional commercial workshop area. And at Stour Valley Business Park we are making alterations to a unit to accommodate a new tenant starting up a micro brewery – one to watch for the future! We have let our last retail unit in Sandwich and we are in the process of a total refurbishment to one of our restaurants in Canterbury, re-let to a previous tenant who will be opening a vegetarian restaurant in late summer.

So, positive feelings overall following the Budget, but what next for Stour Valley Estates?

In short we, as I’m sure every business is, are starting to look again at plans for growth. The positive signs are giving us the confidence to start planning construction of some new additional small business units, coupled with warehouse and industrial units. Because when businesses come looking for new premises then we need to be ready.

More details on the Stour Valley Estates business parks and our other commercial properties to let can be found on our website at www.stourvalley.com, or by phoning our Property Manager Katie Dove on 01304 849210.

June 2010