For British Homeowners, No Newts Is Good Newts
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For British Homeowners, No Newts Is Good Newts

Endangered amphibian endangers new construction for pop stars and politicians; Boris Johnson promises to build a ‘newtopia’ to compensate for a swimming pool

By MAX COLCHESTER
Fri, Aug 25, 2023 9:05amGrey Clock 4 min

EASTCOURT, England—The bane of Britain’s great and powerful is a couple of inches long, has warty skin and a bright orange underbelly—and the power to disrupt some of their most heartfelt ambitions.

Singer Ed Sheeran, King Charles and former Prime Minister Boris Johnson are among the many homeowners in Britain who have, at one time or another, been warned they might have to alter their building plans to accommodate the great crested newt.

Britain is a country where the public proudly regard themselves as animal lovers. There are no wolves, lynxes or bears left in the wild here. But it turns out parts of the island nation have one of the greatest concentrations of great crested newts in Europe.

The tiny amphibian has a protected status here because its population is shrinking. Purposely killing a crested newt or destroying its habitat can result in a six-month jail sentence and unlimited fine. So before anything is built, Britons must be sure the area is newt-free and no newt home is harmed, a process that can take months and cost thousands of pounds.

Johnson once railed against “newt counting” as a symbol of excessive red tape hampering Britain’s notoriously slow housing developers. But when his plan to build a swimming pool at his Oxfordshire manor was recently delayed because it might disturb newts that might be in his nearby moat, Johnson offered to roll out the red carpet. He pledged to build a special pond, or, as he called it, “a newtopia,” to house them. He declined to comment further.

If a newt is found in a pond near a construction site, mitigation measures must be taken before the first brick is laid. That can range from building a special “newt fence” to protect it from wandering into harm’s way to hand collecting newts to move them to an artificial wetland, a la Johnson’s planned pond.

The regulations have spawned numerous newt consultants, who charge a fee that starts at around £200 ($253) to make sure homeowners don’t run afoul of the law. Teams of trained sniffer dogs can be employed to comb ponds near construction sites to give the all-clear. There are specially constructed “newt tunnels” dug under several major British roads—often costing millions of pounds—that allow the animals to crawl around freely. They have to be over 6 feet wide; otherwise they get too chilly and the newts refuse to use them.

On a recent day, Freya, a lively 8-year-old springer spaniel, charged around a field here in southwestern England, lying prone whenever she sniffed a crested newt. Her handler, Nikki Glover, is an ecologist who works for Wessex Water, a utility that wants to install water pipes in the area in September. It needs a newt count before it embarks on plans to move them to a suitable habitat.

Soon after starting to sniff around, Freya tugs at her leash and dives into a thick bush of brambles. “There’s interest there,” Glover says, before yanking on a blue plastic glove, crouching into the undergrowth, and reaching into a small muddy crevice. Her hand emerges cradling a newt.

The British government champions kits that detect DNA in pond water that it says can cut the red tape and find crested newts when they congregate during their breeding season. Annoyingly it means the tests must be completed between March and July as that is the only time the newts get it on, an elaborate ceremony which can include the small male newt tail-whipping his larger partner. “There are seasonal constraints,” says John Wenman, who runs an ecological consulting firm in Berkshire.

The little amphibian plays an outsize role in British culture. “Eye of newt” is a key ingredient in the witches brew in Shakespeare’s Macbeth (although even those witches wouldn’t actually hurt a newt—the expression is a pseudonym for mustard seed). When British people get very drunk they say they are “pissed as a newt” (origins unclear but perhaps linked to young sailors who were called “newts”). Former London mayor Ken Livingstone made political hay by owning pet newts.

Recently, newts have suffered a public-relations setback, becoming a symbol for unnecessary bureaucracy in a country where getting permission to build anything is lengthy and expensive. Britain faces an acute housing shortage, and homes remain unaffordable for many families. “For many years now, the great crested newt has had to live with a bad name,” Natural England, a government agency tasked with protecting the environment, warned on a blog a few years back.

In 2018, a council in Nottingham tendered for a contract worth up to £40,000 to relocate some 40 newts from a construction zone. When developing the stadium for the 2012 London Olympics, newts on the site in east London were hand collected in special plastic bottles and moved elsewhere. In 2017 the U.K. government reported that a house builder once paid an average of £2,261.55, or more than $2,800, per relocated newt. “No newts is good newts,” said one headline in Building Magazine.

Actress Cate Blanchett had to acquire a special license after newt consultants concluded there was “average to excellent habitat suitability” for crested newts in nearby water. She is trying to install several solar panels at her house in Sussex. King Charles was warned about disturbing newts by a British amphibian lobby group when he recently proposed to build a gift shop at his residence at Highgrove. Crested newts briefly threatened a plan by Ed Sheeran to build a chapel on his property until he built an amphibian-proof fence to protect them.

Many newt consultants rely on low-tech methods such as “torching,” or shining flashlights at ponds during the night to count crested newts. Glover, the ecologist, swears by dogs.

To teach Freya to find newts, Glover turned to Louise Wilson, a veteran dog trainer in north Wales who cut her teeth using canines to search for improvised explosive devices and drugs.

When a sewage pipe cracked near Bristol recently, before Wessex Water could stop the effluent from flowing out it had to first make sure no crested newts would be harmed by the diggers turning up to do the repair. Glover and Freya appeared and within days had evacuated 86 newts. She estimates more traditional methods would have required a month of newt hunting.

“There is no other tool that would show you there is a newt in the burrow,” she says.



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The Properties High Interest Rates Can’t Touch

Competition to buy the world’s most exclusive stores is intense despite modest rent growth. Even Blackstone is ogling the market.

By CAROL RYAN
Mon, May 20, 2024 3 min

Don’t expect any fashion bargains on Rodeo Drive in Beverly Hills, or New York’s Fifth Avenue. And property on these famous luxury shopping streets looks as overpriced as the clothes.

While the average commercial building is worth 20% less than in 2022, the world’s most exclusive shops have barely been touched by the highest U.S. and European interest rates in two decades.

Cartier’s Swiss owner, Compagnie Financière Richemont , recently bought a property on London’s Bond Street at a rock-bottom 2.2% rent yield. Similar to the way bonds work, the lower the rent yield, the richer the price paid. The Bank of England’s base rate is around double this level. Most investors these days wouldn’t buy real estate that generates less income than the cost of debt that might be used to purchase it.

Last month, Blackstone sold a luxury store on Milan’s Via Montenapoleone to Gucci owner Kering for a similarly eye-catching price. The building was part of a portfolio of 14 properties that Blackstone bought in 2021 for 1.1 billion euros, equivalent to roughly $1.2 billion. Kering coughed up €1.3 billion, or about $1.4 billion, for the Via Montenapoleone building alone, equivalent to a 2.5% rent yield.

The private-equity firm is understandably eager to do more deals like this, and has since bought another luxury store in London. It is a surprising focus for Blackstone, which for years steered clear of retail property.

Luxury rents are resilient, but they aren’t rising fast enough to justify such hefty price tags for the buildings. Last year, rents increased 3% on Rodeo Drive and were flat on Upper Fifth Avenue, according to data from Cushman & Wakefield .

What luxury retail properties do offer is scarcity. London’s Bond Street has 150 individual buildings, according to real-estate consulting firm CBRE . But because luxury brands are fussy about where they will open a flagship store, only around two-thirds of the street is considered posh enough, limiting their options.

Supply is even tighter on New York’s Fifth Avenue, where just four or five blocks of the six-mile avenue are ritzy enough to lure the world’s most expensive brands. The luxury shopping district of Rodeo Drive in Los Angeles has fewer than 50 individual buildings.

This creates intense competition for both space and ownership. The world’s biggest luxury company, LVMH , has more than 70 brands that need a foothold on prominent shopping streets. Increasingly, LVMH’s answer is to buy the best locations. The Paris-listed company owns at least six properties on Rodeo Drive and six on London’s Bond Street.

Luxury brands see their flagship stores as marketing tools. Counterintuitively, e-commerce has made its physical locations more important. Labels including Christian Dior have opened restaurants and mini museums in their boutiques to give shoppers an experience they can’t find online.

When they are investing this much money in refurbishments, it makes more sense to own than to rent . Luxury brands have spent more than $9 billion buying boutiques since the start of 2023, according to a Bernstein analysis, and they control increasingly larger tracts of major shopping districts. Back in 2009, brands owned 15% of the buildings on London’s Bond Street, says Phil Cann, an executive director at CBRE. Today, their share has jumped to 30%.

Luxury labels also need to avoid being kicked out of a property by a rival-turned-landlord, which is happening more often. British handbag maker Asprey was given its marching orders by Hermès on London’s Bond Street. The French brand bought the building that Asprey occupied since the 1840s and wants to convert it into an Hermès flagship. Rolex recently bought a store that is rented out to Patek Philippe, although its competitor doesn’t need to move out any time soon as there are still several years left on the lease.

Most luxury stores are still in the hands of sovereign-wealth funds or rich families who might have owned the buildings for decades. Given the enticing prices that brands are willing to pay despite high interest rates, more are considering cashing out.

Landlords from Hong Kong, who began parking their cash in luxury stores around 2010, are among those selling up. New York real-estate investor Wharton Properties also sold two Fifth Avenue buildings to Kering and Prada this year at very high prices that were equivalent to 2% rent yields. Wharton is experiencing some distress in other parts of its portfolio, so it might have needed to raise funds.

Luxury brands made huge amounts of money during the pandemic. Richemont currently has more than €7 billion of net cash sitting on its balance sheet. Merger and acquisition activity has been quiet, so real estate might be the next-best thing to pour their riches into.

Property deals on the world’s most expensive streets will continue to operate in their own twilight zone, no matter what central bankers do next.

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