Business News Round Up (08/08/2024)
Prime Edinburgh office rents grow at fastest rate since 2015
Prime city centre office rents in Edinburgh are rising at their fastest rate in nearly a decade, according to analysis from Knight Frank. It showed that during 2023 prime office rents rose by 8% from £40 per sq. ft. to £43 per sq. ft. This was the largest increase since 2015’s 11%, ahead of the 5% annual average since 2014. Despite the challenges the Covid-19 pandemic presented to the office market and the shift towards hybrid working, prime rents have risen in Edinburgh from £35.50 at the end of 2019 to their current level, a 21% increase. The analysis suggests that continued demand for space and development pipeline constriction could push prime rents in Edinburgh city centre up again by the end of 2024. Edinburgh’s overall vacancy rate remained at around 11% during Q2, but new and second-hand Grade A availability has fallen to less than 0.4% and 6.7% respectively.
UK salary growth slows, paving the way for potential interest rate cuts
Wage growth in the UK slowed last month while demand for workers remained steady, potentially setting the stage for further interest rate cuts by the Bank of England. Research from KPMG and the Recruitment and Employment Confederation (REC) reveals that the growth rate of salaries for both permanent and part-time staff decreased in July. The permanent staff salary index dropped to 56.5 from 57.1 in June, remaining above the 50-point mark that signifies growth. The temporary salary index also declined, falling to 50.9 from 53.7. These figures, closely monitored by the Bank of England due to concerns about the accuracy of official labour market estimates, indicate that wage growth is easing from record highs. This trend is partly attributed to the impact of stringent monetary policy on economic demand. Over the past two years, robust salary growth has helped mitigate the effects of the cost-of-living crisis on workers’ real incomes.
“Subdued tone” in North West M&A market – report
A report on the North West’s M&A market in 2024 found the region reached the halfway point of the year “on a somewhat subdued tone”. The report from Experian Market IQ found that the total deal volume so far in H1 2024 stands at 411 transactions, which is 5% lower than the average half-year total over the last ten years. Deal values failed to reach the highs experienced in H1 2023, dropping 60% from £12.8bn to £5bn. However, compared to H1 2022, despite 19% fewer deals recorded, value is 26% higher. The diminished value was put down to a decline in large and mega deals. So far this year, mega deals have been notable by their absence, in stark contrast to the three deals reported in the first half of 2023 valued at £8bn.
https://www.insidermedia.com/news/north-west/subdued-tone-in-north-west-ma-market-report
Glasgow SMEs warned of minimum wage crackdown
Glasgow-based SMEs have been urged to ensure compliance with the national minimum wage (NMW) amid a local crackdown by HMRC. Scotland’s largest city is one of the locations being specifically targeted by the tax authority, and businesses found guilty of non-compliance will be ordered to pay NMW arrears as well as increased national insurance contributions (NICs). Businesses which do not accept HMRC’s initial offer of a health-check meeting also risk financial penalties of up to 200% and public naming and shaming. Accountancy and advisory firm Azets UK, which specialises in the SME sector, warns that many businesses could be inadvertently breaking the rules due to their complexity and common misunderstandings around how to accurately calculate NMW.
https://www.scottishfinancialnews.com/articles/glasgow-smes-warned-of-minimum-wage-crackdown