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Overview of the UK Food Industry: Trends, Investments, and Property Projects

The UK food industry stands as the largest manufacturing sector, contributing £74 billion in turnover and £22.7 billion in gross value added, making up 14% of the UK's manufacturing GVA. Despite a cautious investment landscape, recent surveys show confidence among agri-food executives, with 70% ready to invest significantly. However, the property market faces challenges like low speculative development and planning uncertainties. Key considerations include location, reversionary value, and portfolio rationalization, highlighting potential opportunities amid market variations.

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Overview of the UK Food Industry: Trends, Investments, and Property Projects

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  1. Food Projects LINDUM JV PROPERTY FOOD PROPERTY MARKET OVERVIEW

  2. Food Projects Food Industry Fact Box • It is the country’s largest manufacturing sector • It generates a turnover of £74 billion • It has a gross value added of £22.7 billion • It accounts for 14% of the UK’s total manufacturing gross value added • It exports £13.2 billion of products • It directly employs around 410,000 people • It comprises 6,745 enterprises

  3. Food Projects English Farming and Food Partnerships (EFFP) 70 senior agri-food executives surveyed in May 2010 • 90% increasingly confident • 70% ready to invest significant sums • 21% would be pumping in more than £5million • 50% would be pumping in between £500k and £5 million • 83% confident they can raise cash or already have cash reserves

  4. Food Projects Industrial Property Sector Overall Picture: • Little speculative development • Large regional variations – London and South East -v- rest of UK • Good value second hand stock – but still relatively scarce • ‘Odd’ bargain to be had • Investment market yields much higher, (better returns required) • Reversionary value of property a greater consideration • Longer lease periods being requested

  5. Food Projects Supply Factors • Low interest rates • Banks less keen to lend; higher equity required • Land still in relatively few hands • Planning uncertainty/delays • Empty Business Rates 6. Landowners keen to receive income rather than capital receipts • Banks do not wish to realise further losses

  6. Food Projects Tenure Options 1. Freehold • Leasehold 3. Lease with option to buy 4. Sale and Leaseback 5. Joint Ventures eg spv holds asset, reduced rent, more flexible terms

  7. Food Projects Food Sector – Specific Considerations • Location • Alternative uses – reversionary value • Covenant Strength – investors/banks view on sector 4. High level of fit out • Opportunities to rationalise portfolio, consider valuable sites 6. Asset -v- means of production

  8. Food Projects Wardentree Court, Plot 6

  9. Food Projects Property Procurement Opportunities • Joint Ventures 2. Funding Streams • Strategic Property Reviews • Bullet/Deferred payments

  10. Food Projects TAX ALLOWANCES/CONSIDERATIONS • IBA’s nearly phased out (2012) • Capital Allowances - investment allowance £100k Integral -v- Non-integral 10%→8% 20%→18% 5 categories Electrical Roller shutter doors, motors/elec Aircon/space heating Ironmongery (mechanical parts) Lift Door entry systems Cold water External solar shading • Enhanced Capital Allowances -100% Rain water harvesting Qualifying heating systems

  11. Food Projects ANY QUESTIONS?

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