Pollution, purchases and plastination

Deal  After more than three years of attempts, Boris Johnson appears to have secured what Theresa May could not – an exit from the EU which is supported by Parliament. A majority of 30 supported the Withdrawal Agreement Bill; however, a more-slender majority of 14 voted down the PM’s expedited timetable to achieve this. What happens now? It seems likely that the EU will look favourably on the UK’s extension request and postpone the exit date (due on Halloween) to 31 January 2020. Meanwhile, Johnson has deferred progress to bring in the draft legislation, therefore leaving the UK at a risk of no-deal in the unlikely event that an extension is not granted. Progress will not be straightforward. Despite having won support in principle, Boris’s failure to push the deal over the line raises the prospect of the agreement being unpicked through a series of amendments. The reality is that he is still not in control of Parliament and so leads on this issue through the grace of the DUP, pro-Brexit Labour MPs and his own rebels. To be sure of the numbers he needs to get the Bill passed, the only real option is a general election. Again, this is not in his gift; but assuming the extension is granted, the pressure will pile on Labour to acquiesce. For those who like to place bets, the odds of still being in the EU on 1 November is now a secure 1/33; the safe bet is that we will leave at some point between then and the year end (5/4), and we will have a general election within the same timeframe (10/11). The important question is therefore who would win that general election. The bookies place strong likelihood on the Tories (2/7), and the polls agree, (35% to Labour’s 25%).


CO-LIV  When we talk about the co-revolution in the world of real estate, we are really talking about co-working and the associated flex office growth. From a standing start, the delta on take-up of co-working spaces has been significant, as is the potential for this to affect total stock over time. Meanwhile, retailers tend not to share occupancy other than in market halls and the co-living sector has been much vaunted but lacking in any real support from institutional investors. Until now, that is. Last week DTZ Investors partnered with The Collective to deliver ‘the world’s first institutional large-scale co-living fund’; a raise of £650m, with £60m of the £70m seeded by DTZi pension client capital. Several trends that I talk to in this blog support co-living, including: (a) being single for longer, (b) increasing workforce mobility across cities and borders, and (c) a loss of (and search for) a greater sense of community and belonging in our increasingly impersonal big cities. Above all these, however, is the fact that the industry has so far failed to deliver on satisfying manifest consumer need. In a society where ~30% of school leavers go to university and most live at some point in what are increasingly luxurious student halls of residence or private halls, to then suffer the typically retrograde step of having to share a Victorian conversion with one or two friends, no facilities and no events, when one starts earning cannot be right. You can find out more about the CO-LIV fund, here.


Powerful art  A study recently released by academics in the US and Denmark has found that environmental pollution is linked to cases of psychiatric disorders. The study found a statistically significant correlation between exposure to air pollution (particularly during the early years of one’s life) and mental health disorders such as schizophrenia, bipolar disorder, and depression. This adds to the list of other health issues created by air pollutants such as lung disease, and heart problems. The findings add further pressure to residences along polluted streets, in turn fuelling the fire for EV (electric vehicle) adoption. They also add to the already significant case against burning fossils fuels. So, what might become of our former fossil fuel power stations? An example can be found in Luckenwalde in the German state of Brandenburg. The power station there closed over 30 years ago but is now set to reopen in the form of ‘E-Werk’. The repurposed power station will be a carbon neutral art exhibition, workshops and studio space for artists. The whole thing will be powered using locally-sourced woodchip, with surplus energy returned to the grid to support other art installations. The heated wastewater will be recycled to make coffee and as part of a craft brewing process.


Reselling  When the world went digital, most retailers followed suit and developed their own digital mechanism for reaching their customers. There were a few exceptions; Primark being one of them. Primark’s lack of an online channel has been others’ gain. Unofficial resellers have been flogging Primark gear on Amazon for mark-ups of up to double the Primark retail price, causing the Irish retailer to this week release a warning to its customers not to buy at inflated prices. What if anything can be learned from this? Perhaps for Primark this highlights an opportunity, either in building an online presence, or in its pricing policies. More generally, it provides some insight into how and why people buy. The consumer it seems might not be as price sensitive as one might assume to the delivery and handling charges that need to be built into a reseller’s model. This might be explained in two ways. Firstly, consumers might be willing to pay more for the convenience of online delivery (and to avoid the opportunity costs of having to go to the shops). That would be particularly the case where the store portfolio is sparsely distributed, and so where the inconvenience costs are high. Perhaps this also explains why grocery is one of the sectors that is least impacted by e-commerce (convenience shops being everywhere). Secondly, where a brand is selling a unique product, the lack of competition provides an opportunity for mispricing. The most inflated prices were on themed products (e.g. Harry Potter merchandise) with limited supply. The purchase and resale of these products created a marketplace that would otherwise not exist.


Having the last laugh  ‘In this world nothing can be said to be said to be certain, except death and taxes’, wrote Benjamin Franklin, reflecting on whether his new Constitution would achieve permanence. In a society which provides public services and redistributes wealth among its citizens, taxes remain an unwelcome certainty. Death, perhaps less so. Successful experiments in CRISPR genome editing this week hold out hope that genetic diseases could soon be a thing of the past. As we live longer, the rate of trips to the grave becomes less frequent but with a growing global population, we’re still running out of space near our major cities to put people in the ground. Thankfully many innovations in this space provide alternatives to conventional burial or cremation. Cryonics is one such option – over 1,500 people worldwide have signed up to be frozen on their death (…zero thawed out so far). A recent trend is being ‘planted’ with a seed and essentially turning into a tree. Other options include: aquamation (being dissolved), plastination (being turned into plastic) and promession (being turned into manure). My personal preference would be either a space burial (no explanation needed) or vinyl compression (being turned into an actual playable record). Not tempted? For those opting for a more traditional route there’s still room to have the last laugh. Earlier this month, unbeknown to mourners at his funeral, Shay Bradley from Kilkenny was buried together with a pre-recorded message. As the coffin descended, the congregation heard a noise from the box, ‘Hello? It’s Shay. Let me out, it’s f***ing dark in here’. Not quite as poetic as Franklin, but memorable nonetheless.