Wednesday, June 17, 2009

Don't hold your breath...

I'm glad someone has finally said it isn't as good as you think. Perhaps around the bars in Westminster things are looking better as the Summer Season gets going, but here in the real world things are anything BUT rosey. I can't get the graphs to come across, but if you have a look at the article, they are all there to be seen.
In essence, things are just as bad, if not worse, than in 1929. The only difference is the interest rate regime and the monetary response ( although one of the graphs worryingly points out that monetary growth continued for some considerable time after 1929)
More importantly, what's happening on the ground?
We landlords are always the first to feel the pinch and last to come out of recession. If you are a manufacturer, you give what little money you have to your suppliers - landlords come last. A landlord will always do a deal to keep you in the property as otherwise he has to pay the rates and the upkeep, so even NO rent is better than NO tenant.
A stark example is one of our tenants who until November was talking of taking extra space. Admittedly his business relies on entertainment, both corporate and private, but his business has literally died. He's fired everyone apart from one YT, and is back where he started 5 years ago -but in worse shape as the bank won't even give him the overdraft it gave him then.
Another is finding that every time he makes a sale, when he delivers, the client wants "£150 off" or some such figure, and his margins are already squeezed to nothing to get the sale. And then arbitrarily an extra 30 days credit is being taken, not least by government departments.
So it ain't over yet by any means.
I stick to my forecast of some time ago that things will continue to get worse until some time around Easter 2010 - and we'll then have 18 months or so of levelling off, before ANY talk of green shoots is appropriate.

1 comment:

Winchester whisperer said...

yes - looks as if we're heading for another winter of discontent