David Birne is qualified as an accountant and insolvency practitioner, and has been working in the insolvency field for over 30 years. David advises individuals and company directors on their obligations and options when their business is or is likely to become distressed. He first met Karen when she was at Boodle Hatfield, “her expertise in the retail industry was invaluable.”
1. What is your background and experience in the property industry?
Having qualified as an accountant and an insolvency practitioner I been working within the insolvency field for over 30 years I have frequently come across property related matters. Property matters include:
- Selling freehold property in an Administration or insolvent liquidation process.
- Acting as Law of Property Act 1925 (LPA) or fixed charge receiver under instruction of a charge holder
- Under a Company Voluntary Arrangement obtaining the rental market value to rationalise a trading groups space
- Entering into licences to occupy a property as part of an Administration
- Valuing residual interest in a lease for the purposes of establishing a landlords claim for the purposes of a dividend to unsecured creditors
2. Can you tell us a bit about your business and what you do?
As an Insolvency Practitioner and Business Recovery Professional I advise individuals and company directors on their obligations and options when their business is financially distressed or likely to become distressed. There are informal options available such as time to pay or creditor negotiations and more formal options typically including Administration, Liquidation and Voluntary Arrangements.
For the formal options I take on a formal role as Administrator, Liquidator or Supervisor with the general aim to maximise assets available for creditors.
3. Who are your typical clients and how do you market your service?
I am working firmly within the SME sector, providing advice for entities from £100,000 to £150m turnover. I’m sector agnostic and have touched many types of business over the years. Recent appointments include a social housing maintenance company, a wellness retail business, a cosmetic manufacturing business, a software development company and regrettably a number of property developers.
Marketing is normally through promoting awareness of the services on offer. When business owners are in financial difficulty they tend to seek advice from their trusted advisor which may be their accountant or lawyer. Marketing is therefore oriented towards these professionals.
4. How did you first cross paths with Newmanor Law?
I came across Karen when she was at Boodle Hatfield. Karen’s expertise in the retail industry was invaluable when I was dealing with lease issues. I have continued to maintain contact with Karen and we held a fascinating joint breakfast seminar (Newmanor / Begbies Traynor) on property development.
5. What are the key challenges currently facing the real estate sector and how are you addressing them?
Although the breakfast seminar was a couple of years ago, the same sentiments are present. In the room were property developers, financiers, shopping centre experts and other property professionals. The overriding thoughts on the day were that property development was in a challenging phase due to delays in planning permission, financiers looking for high returns on capital which were way in excess of returns available to developers, developers not wanting to take risks given the low returns and uncertainty. A couple of months ago I liquidated a very experienced property developer for many of the reasons discussed at the seminar including having to deal with the failure of the main contractor, base cost increases and reduced demand for the end product.
6. What trends do you foresee shaping the real estate industry in the coming years?
That is crystal ball gazing!
The positive sides are that interest rates are reducing so financing should be less expensive. At the same time there is demand for good quality and well positioned developments.
The well publicised changes to the rental residential market, including greater regulation have already changed rental sector dynamics.
AI is affecting all industries, and I suppose that this will also change the demand for offices and is even likely to change the way property transactions are carried out. AI requires greater computer power so there will be demand for data centres.
At a recent presentation the effect of aging populations throughout the world was discussed. This will affect how public projects are financed and the type of projects being chosen. The expectation is therefore more demand for care homes services.
I can see from enquiries coming across my desk that retail on the high street is still struggling if not in prime location and the increase in rates will only exacerbate this.