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Property values have increased rapidly in the south east quadrant of Great Britain in recent years; in some cases the capital appreciation of homes there has exceeded the annual incomes of the residents. Many people have mistakenly assumed that property prices do not rise and fall the way that stock prices do, however. A potentially dangerous trend of buying properties for their investment value is emerging. Property values fell steeply in 1973, and it is entirely possible that this could happen again if the real estate market reflects the Oct 1987 stock market crash.

Guidelines for office relocations are presented. Managers should be aware that increased use of computers and telecommunications equipment by businesses has affected floor space and utility requirements. When selecting a new location, the businesses' future staff and storage needs should also be considered. The company should determine beforehand how much rent it is willing to pay, and how far away from the present location the company and staff are willing to relocate. Different areas and industries of Great Britain are varying stages of recovery from the recession of the early 1980s, and this has an important effect on the availability and price of commercial properties.

London's commercial market is rapidly expanding with plans for future development on a giant scale, but there are hints that many firms are planning to leave the city because of high rents. Experts are unsure whether there is enough demand to warrant the huge office complexes that are being considered. A 1986 study by Debenham Tewson and Chinnocks of office reveals that office rents were 35 pounds sterling per square foot, but in 1988 new buildings were garnering rents of 60 pounds sterling per square foot. Businesses may prosper from a flooded market, however, because they will have more types of offices to chose from, and rates will ultimately fall.

Investments in British commercial property are changing, especially in The City, London's Wall Street. UK institutional investment is down; foreign investment is up. Pension plans are getting out; the private sector is getting in. Insurance companies are increasing their interest, and to fill the rest of the gap are UK banks, foreign banks, owner-occupiers, leasers, and corporations. Buildings and property are being 'unitized', or sold to groups of owners, each of whom have a small unit share. Another trend is the increasing percentage of foreign-owned UK property.

Companies which wish to construct or renovate a building for their use may now turn to the British Property Federation (BPF) and their new contract form, which reduces or eliminates all architectural design and construction worries by placing the entire enterprise into the hands of a contractor. The contract was developed in cooperation with the Association of Consultant Architects. It is also possible for a company to work, instead, with a developer, which has the advantage of readily available property at more reasonable prices. The company can also work entirely alone, which will be time-consuming and expensive, but may theoretically produce exactly the right result.

New management skills have been developed to control office overhead. These skills include energy management, maintenance audits, and negotiation with landlords. Microchip-based energy management systems can replace up to several hundred time switches in a building, thus saving energy costs by eliminating the need for extra electrical wiring. Premise audits can be a useful tool to help businesses identify operational and cleaning costs, which can serve not only to find waste but also to aid in rent reviews between landlord and tenant.

The current high interest rates and real estate market conditions in the UK have prompted banks and building societies to create new mortgage packages. One of the new programs called a 'currency mortgage' involves borrowing from overseas banks in a foreign currency. This offers borrowers the advantage of lower interest rates, but they also take on the risk of exchange rate fluctuations which can greatly affect monthly payments. Another mortgage innovation is an account that allow borrowers to choose the level of monthly payments, borrow cash advances, and maintain a fixed interest rate of 13.5%. Other special mortgage schemes involve special loans for young professionals, mortgages for renovation projects, and loans for ecologically- related dwellings.

British companies which intend to launch a foreign branch or subsidiary in another European Community country in time for 1992 unification need to thoroughly research the different local laws and business conventions that govern commercial property markets in each country. Leases vary from country to country. Special incentive programs designed to booster depressed areas are also varied. UK companies should expect differences especially in countries that are administered under the Napoleonic Code. The best means of research will come from the development agencies of specific countries or specific regions within countries.

Relocating an office requires as much careful planning as finding and leasing one. A project manager should be appointed to oversee the move. The role of the office manager should be that of coordinator. Decision-making should remain in the hands of senior management. Businesses should not accept disorganization while moving as inevitable. Guidelines for efficient and economical moving are included.

The European free trade agreement to take effect in 1992 has sparked a recent increase in foreign investment in the UK from such countries as the United States and Japan which want to establish bases to participate in European markets. Great Britain's social stability and its English-speaking emphasis are what attracts many investors. The US Department of Commerce reveals that Great Britain makes up 36% of direct US investment in the European Community, and the Japanese Finance Ministry reveals that Great Britain accounts for 29% of the direct investment in Europe by the Japanese.

The results of a poor corporate image include: low levels of profits; increased employee absenteeism; and difficulty in recruiting clients. UK businesses do not appreciate the importance of office design as an aspect of corporate image, and usually rent offices that are tailored to landlord specifications rather than their needs. Companies must become more appreciative of corporate image and the role of office space in fostering that image in order to remain competitive. UK businesses need to make more use of shell and core building developments that allow them to rent raw space that can be tailored to business needs.

Foreign real estate investments involve careful analysis of market conditions, tax regulations, and local laws. People making a foreign real estate investment should determine if they want the property as a second home in a foreign locale, or if they want it as an investment for making a quick profit. People considering foreign real estate as a quick investment should make sure the property they buy is very accessible, secure and easy to maintain. Investors should also be aware that: foreign closing costs are usually much higher than in England and run between 10% and 20%; many countries such as Spain have introduced laws to reduce real estate speculation; and impartial legal advice can be hard to find.

London's imminent unitization of the commercial property market will allow small investors to purchase units of office buildings, shopping centers, and industrial parks, in order to receive quarterly dividend benefits after deduction of management fees and withholding taxes. The unitization plans should also facilitate obtaining financing for commercial real estate projects. One of the first real estate units that will be traded on the London Stock Exchange is the Property Income Certificates (or PINCS) available from the British real estate firm of Richard Ellis and County. Each PINC purchase will occasion the transfer of two certificates, one which provides the holder with the right to quarterly income from the unit and one which allows the holder one vote in the related real estate management firm.