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London N1 - 104 Islington High Street
23/May/2014 - A-Landlord - London N1
I have acted for the landlord of 104 Islington High Street, a Grade II listed building next door to Frederick's restaurant, since about 1987. At that time the ground floor shop and basement was let to an antiques dealer. Later, the lease was assigned to a silversmith, and thereafter to an interior furnishing shop.
In 2013, the tenant wanted to assign the residue of the term so the lease was surrendered and a new lease granted simultaneously. The new tenant has completely renovated the ground floor and premises for use as a bridal retreat and beauty spa. In August 2013, my Client invited me to become a trustee for the freeholder. I accepted and continue to act as property adviser on tenancy matters arising.
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In 2013, the tenant wanted to assign the residue of the term so the lease was surrendered and a new lease granted simultaneously. The new tenant has completely renovated the ground floor and premises for use as a bridal retreat and beauty spa. In August 2013, my Client invited me to become a trustee for the freeholder. I accepted and continue to act as property adviser on tenancy matters arising.
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London SE1 - 178 Lambeth Road
01/Jan/2014 - A-Tenant - London SE1
A cafe/restaurant with flats above, the property occupies a prominent corner in an isolated trading position.
Acting for the Tenant, for the 2008 review, the landlord's proposal was £34,000 pa. I served the counter-notice to prevent the proposal becoming binding and then negotiated a reduction of £11,000 per annum.
Following expiry of the contractual term, in 2014 the Tenant instructed me to negotiate renewal of the lease.
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Acting for the Tenant, for the 2008 review, the landlord's proposal was £34,000 pa. I served the counter-notice to prevent the proposal becoming binding and then negotiated a reduction of £11,000 per annum.
Following expiry of the contractual term, in 2014 the Tenant instructed me to negotiate renewal of the lease.
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London E13 - 384 Green Street
01/Jan/2014 - A-Landlord - London E13
In 1988, the freehold of 384 Green Street, Upton Park, London E13 was bought at auction on sale-and-leaseback to Boots for a term of 25 years with 5 yearly rent reviews. .
In a corner position, at the junction with Harold Road, and close to Upton Park Station, the property is a ground floor shop with ancillary space on two floors above. It has on-site parking for 1-2 vehicles in its own yard. The trading position is amongst the finest, with Peacocks, Iceland and Tesco Metro a few doors along in the same parade.
Acting for the Landlord. I negotiate rent reviews, lease renewal and advise on matters arising.
For the first ten years, difficulty in finding hard evidence because of a paucity of new lettings meant that the rent did not increase by much. Referring the 2008 review to arbitration was the first time since 1988 that the rent had been assessed objectively and the award increased the rent by approximately 30% There are 4 advertising panels on the return frontage for which at previous reviews the tenant had resisted paying. This time, I got £250 a year. For that 2008 review, the tenant's surveyor was of the opinion the rent should not increase and cited evidence of 2005 reviews at Zone A £38.75 in the same parade. I disagreed with that as evidence, because it involved large stores which, in my experienced, are normally valued overall, rather than in zones. The reasoned award was Zone A £50
The contractual term expired in 2013 and I am dealing with negotiations for renewal of the lease to Boots. A substantial increase has been agreed in principle.
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In a corner position, at the junction with Harold Road, and close to Upton Park Station, the property is a ground floor shop with ancillary space on two floors above. It has on-site parking for 1-2 vehicles in its own yard. The trading position is amongst the finest, with Peacocks, Iceland and Tesco Metro a few doors along in the same parade.
Acting for the Landlord. I negotiate rent reviews, lease renewal and advise on matters arising.
For the first ten years, difficulty in finding hard evidence because of a paucity of new lettings meant that the rent did not increase by much. Referring the 2008 review to arbitration was the first time since 1988 that the rent had been assessed objectively and the award increased the rent by approximately 30% There are 4 advertising panels on the return frontage for which at previous reviews the tenant had resisted paying. This time, I got £250 a year. For that 2008 review, the tenant's surveyor was of the opinion the rent should not increase and cited evidence of 2005 reviews at Zone A £38.75 in the same parade. I disagreed with that as evidence, because it involved large stores which, in my experienced, are normally valued overall, rather than in zones. The reasoned award was Zone A £50
The contractual term expired in 2013 and I am dealing with negotiations for renewal of the lease to Boots. A substantial increase has been agreed in principle.
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Greenford - 30 and 32 The Broadway
01/Jan/2014 - A-Landlord - Greenford
For the landlord of 30 and 32 The Broadway, Greenford, I provide rent review and lease advice and handle matters arising.
No. 30 - In 2001, I negotiated restructuring of the lease to Oxfam so that the flat above was surrendered to the landlord. In 2006, Oxfam decided not to renew its lease on expiry so I handled the dilapidations claim and arranged new letting of the shop to UK Pet Centres. The rent devalues to approximately £44.75 Zone A which is one of if not the highest rent in this part of the parade. The rent was reviewed in 2012 to Zone A £59.51. The lease was subsequently assigned to DTW Associates trading as Cash & Cheque Express.
No. 32 - The entire property (shop and flat) was let to O & H Properties Ltd which in turn had sub-let the flat and shop separately. In 2007, I advised on the dilapidations claim, requiring the Lessee to carry out major repairs to the structure. Also, I negotiated renewal of the tenancy of the shop and which is now let on lease outside the Landlord and Tenant Act 1954. For 2014, negotiations are underway to regularise a change in the tenant's occupancy.
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No. 30 - In 2001, I negotiated restructuring of the lease to Oxfam so that the flat above was surrendered to the landlord. In 2006, Oxfam decided not to renew its lease on expiry so I handled the dilapidations claim and arranged new letting of the shop to UK Pet Centres. The rent devalues to approximately £44.75 Zone A which is one of if not the highest rent in this part of the parade. The rent was reviewed in 2012 to Zone A £59.51. The lease was subsequently assigned to DTW Associates trading as Cash & Cheque Express.
No. 32 - The entire property (shop and flat) was let to O & H Properties Ltd which in turn had sub-let the flat and shop separately. In 2007, I advised on the dilapidations claim, requiring the Lessee to carry out major repairs to the structure. Also, I negotiated renewal of the tenancy of the shop and which is now let on lease outside the Landlord and Tenant Act 1954. For 2014, negotiations are underway to regularise a change in the tenant's occupancy.
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London N1 - 15 Hoxton Market
01/Sep/2013 - A-Landlord - London N1
I have acted for the Landlord of 15 Hoxton Market, London N1 since the late 1980s when the building was occupied by a carpet wholesaler. After the client died, I carried out the valuation for probate including negotiation with the District Valuer. I continue to act for the beneficiaries of the estate, When the property became vacant, the upper floors were converted into residential flats and in 1999 I let the ground floor and basement to The Real Greek restaurant, whose celebrity chef at the time was Theodore Kyriakou.
The tenant company was sold to another restaurant group and, in 2013, the lease was assigned to Meatailer Ltd. I have dealt with the rent reviews and advised on the assignment. I continue to act as Managing Agent for the Landlord.
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The tenant company was sold to another restaurant group and, in 2013, the lease was assigned to Meatailer Ltd. I have dealt with the rent reviews and advised on the assignment. I continue to act as Managing Agent for the Landlord.
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Polegate - 59-61 High Street
25/Dec/2011 - A-Landlord - Polegate
In 2007, 59-61 High Street, Polegate, East Sussex was bought at auction on sale-and-leaseback to Barclays Bank. Acting for the Landlord, I dealt with the 2011 rent review which was agreed at circa 7% increase.
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Ilford - 314 Ilford Lane
29/Sep/2011 - A-Landlord - Ilford
At 314 Ilford Lane, Ilford, I have acted for the landlord, a private investor, since 1984.
I negotiate rent reviews and lease renewals and provide lease advice for matters arising. Over the years the rent has tripled.
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I negotiate rent reviews and lease renewals and provide lease advice for matters arising. Over the years the rent has tripled.
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London N1 - 315 & 316 Upper Street
29/Sep/2011 - A-Landlord - London N1
At 315 and 316 Upper Street, Islington, London N1, I act for the landlord and negotiate rent reviews and provide lease advice on matters arising.
Other properties I have dealt with in Islington include 1A Florence Street, 274 and 275 Upper Street, and 104 Islington High Street.
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Other properties I have dealt with in Islington include 1A Florence Street, 274 and 275 Upper Street, and 104 Islington High Street.
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London W11 - 229 Portobello Road
01/Jan/2011 - A-Tenant - London W11
Acting for a Subway franchisee, I was instructed to negotiate the 2011 rent review. The landlord also owns the adjoining property let to Starbucks and we were told that the rent on renewal there had been agreed on more favourable terms in order to deter Starbucks from leaving. The landlord's surveyor proposed a hefty increase which could be softened if my Client would agree to a rising rent.
Before my Client had taken the assignment, the previous tenant had agreed the 2007 review coupled with a personal concession on rent payable. The concession expired on the 2011 review date so my Client had no choice but to pay more in any event.
After I was instructed, the landlord's suggested softening of proposed increase was withdrawn and the full market rent required which the surveyor was adamant should be based, pro-rata, on the Starbucks rent.
The lease plan states the agreed areas overall so the surveyor dismissed any idea the shop should be valued in zones. However, Portobello Road shop rents are zoned, also I discovered that the lease plan had been extracted from a shop-fit drawing that had been prepared for the previous tenant before the lease was granted and which also showed a different layout.
I proposed various figures in the hope of getting the landlord to agree and on one occasion the offer would have been accepted in principle, but I then withdrew it after new evidence came to light. By then, the landlord had implemented the dispute resolution procedure in the hope of pressuring an agreement. I concluded it would be best to allow the referral to go ahead and independent expert determine the rent.
The time-frame in the lease by which the independent expert had to determine the rent was tight and the parties would not agree to any deviation from the timetable. In my submission, I pulled out all the stops.
Much to the consternation of the landlord and its surveyor, the outcome was favourable to my Client. The passing rent before the review was £43,500 pa, the landlord's proposal £56,000 pa, and the Determination £45,700 pa.
The Lease did not require the independent expert to give reasons for the determination and he did not. After the determination was released, the landlord's surveyor sought reasons but I objected on the ground there was no benefit to my Client and the landlord capable to forming his own opinion of how the rent had been arrived at.
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Before my Client had taken the assignment, the previous tenant had agreed the 2007 review coupled with a personal concession on rent payable. The concession expired on the 2011 review date so my Client had no choice but to pay more in any event.
After I was instructed, the landlord's suggested softening of proposed increase was withdrawn and the full market rent required which the surveyor was adamant should be based, pro-rata, on the Starbucks rent.
The lease plan states the agreed areas overall so the surveyor dismissed any idea the shop should be valued in zones. However, Portobello Road shop rents are zoned, also I discovered that the lease plan had been extracted from a shop-fit drawing that had been prepared for the previous tenant before the lease was granted and which also showed a different layout.
I proposed various figures in the hope of getting the landlord to agree and on one occasion the offer would have been accepted in principle, but I then withdrew it after new evidence came to light. By then, the landlord had implemented the dispute resolution procedure in the hope of pressuring an agreement. I concluded it would be best to allow the referral to go ahead and independent expert determine the rent.
The time-frame in the lease by which the independent expert had to determine the rent was tight and the parties would not agree to any deviation from the timetable. In my submission, I pulled out all the stops.
Much to the consternation of the landlord and its surveyor, the outcome was favourable to my Client. The passing rent before the review was £43,500 pa, the landlord's proposal £56,000 pa, and the Determination £45,700 pa.
The Lease did not require the independent expert to give reasons for the determination and he did not. After the determination was released, the landlord's surveyor sought reasons but I objected on the ground there was no benefit to my Client and the landlord capable to forming his own opinion of how the rent had been arrived at.
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London W11 - 31 Notting Hill Gate
25/Dec/2009 - A-Tenant - London W11
The premises, in Notting Hill Gate, London W11 were let in 2004 at £50,000 per annum exclusive for a term of 20 years, with 5 yearly rent reviews. The tenancy is outside the Landlord and Tenant Act 1954. In July 2010, the first tenant (a franchisee of Subway) assigned the tenancy to a new franchisee. Before the assignee took over, negotiations for the December 2009 rent review were on-going, both first tenant and the landlord professionally represented. The landlord, represented by Savills, had proposed £80,000 and after extensive negotiations including Calderbank offers the landlord wanted £72,000 pa whereas the first tenant’s surveyors were at £57,000 pa. The landlord, having initiated the dispute procedure, referred the review to an Independent Expert. Even though the assignee had only just taken over the lease, the review negotiations had reached the stage at which it was necessary to make a decision whether to agree £72,000 pa or allow the Independent Expert to proceed. The fees quoted by the first tenant’s surveyor for acting for the assignee on referral were in the region of £4000 plus VAT, excluding any fees payable to the Independent Expert if the determination of rent were at or greater than the landlord’s Calderbank offer.
The assignee contacted me and I was instructed to deal with the review including the dispute resolution proceedings. (Unlike most surveyors, I do not charge any extra for ‘going to arbitration’ and my total fee (exclusive of VATt) was under half the amount that the previous tenant’s surveyor would’ve charged). Before the instruction was formally confirmed, the Landlord's Surveyor telephoned the assignee direct and intimated £60,000 per annum exclusive would be acceptable.
Some information was passed on to me but otherwise I started from scratch. I inspected the premises and made enquiries I considered necessary. The Independent Expert preliminary procedures were underway. I found several points in the interpretation of wording and phrasing of the lease that did not appear to have been explored, so I issued a Calderbank offer at £57,500 pa to protect my Client’s interest on costs. The Landlord would not accept the Calderbank offer, the Independent Expert was asked to proceed.
Acting as advocate, I presented the Independent Expert with submission of seventeen pages, 7350 words. Because the Landlord owns the entire parade in which 31 is located, together with numerous other shops in Notting Hill Gate, the Landlord’s Surveyor had all the evidence. One could have the impression the landlord was invincible. However, the Landlord's Surveyor was acting as expert witness; a role that, in my view, exposes a surveyor to a need for a considerably more accuracy and compliance with technical expectations. My counter-submission, twelve pages and 5400 words, followed by re-examination (five pages, 1800 words) of the expert witness surveyor’s reply.
The determination was £53,630 per annum exclusive. The landlord paid all costs of the Independent Expert.
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The assignee contacted me and I was instructed to deal with the review including the dispute resolution proceedings. (Unlike most surveyors, I do not charge any extra for ‘going to arbitration’ and my total fee (exclusive of VATt) was under half the amount that the previous tenant’s surveyor would’ve charged). Before the instruction was formally confirmed, the Landlord's Surveyor telephoned the assignee direct and intimated £60,000 per annum exclusive would be acceptable.
Some information was passed on to me but otherwise I started from scratch. I inspected the premises and made enquiries I considered necessary. The Independent Expert preliminary procedures were underway. I found several points in the interpretation of wording and phrasing of the lease that did not appear to have been explored, so I issued a Calderbank offer at £57,500 pa to protect my Client’s interest on costs. The Landlord would not accept the Calderbank offer, the Independent Expert was asked to proceed.
Acting as advocate, I presented the Independent Expert with submission of seventeen pages, 7350 words. Because the Landlord owns the entire parade in which 31 is located, together with numerous other shops in Notting Hill Gate, the Landlord’s Surveyor had all the evidence. One could have the impression the landlord was invincible. However, the Landlord's Surveyor was acting as expert witness; a role that, in my view, exposes a surveyor to a need for a considerably more accuracy and compliance with technical expectations. My counter-submission, twelve pages and 5400 words, followed by re-examination (five pages, 1800 words) of the expert witness surveyor’s reply.
The determination was £53,630 per annum exclusive. The landlord paid all costs of the Independent Expert.
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Biddulph - Sale of leases to Sainsbury's
Sainsbury's wanted to develop a new supermarket in Biddulph, Staffordshire and hoped to start work in 2009-2010.
Part of the site included a parade of shops, with flats above, where I acting for two retailers - SW Cotton, Optician at 44/44a High Street, and Morning Fresh greengrocer at 46/46a High Street - in negotiations for surrender of their leases to Sainsbury's, subject to simultaneous leaseback for a few months until vacant possession was required.
For 44/44a I negotiated almost twice as much as Sainsbury's offered originally. For the lease of 46/46a, I negotiated almost three times as much.
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Part of the site included a parade of shops, with flats above, where I acting for two retailers - SW Cotton, Optician at 44/44a High Street, and Morning Fresh greengrocer at 46/46a High Street - in negotiations for surrender of their leases to Sainsbury's, subject to simultaneous leaseback for a few months until vacant possession was required.
For 44/44a I negotiated almost twice as much as Sainsbury's offered originally. For the lease of 46/46a, I negotiated almost three times as much.
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Bury St Edmunds - saving £87,000 pa
01/Jan/2009 - A-Tenant - Bury St Edmunds
Acting for a successful retailer in East Anglia, the premises are on an under-lease from Homebase Ltd. Like many large companies, Homebase has a residual estate: numerous properties that it used to occupy, but which have long since been conveyed to others. (Around the time of my involvement, according to April 2009 accounts, in the public domain, the parent company of Homebase, Home Retail Group plc, made £117.3M provision for onerous lease charges.) In this case, Homebase wanted to assign its lease with an indemnity for the remainder of the term for a difference in repairing covenants, so my Client would be no worse off.
Terms were agreed in principle. At the onset, I said I should not recommend my Client instruct solicitors until the freeholder’s consent had been obtained. The head-lease contains a surrender-back clause, also I did not want my Client to incur costs unnecessarily. Homebase applied for licence to assign, a draft was submitted by the freeholder’s solicitors, and I was told by the surveyor acting for Homebase consent had been given. However, what was not disclosed until much later on was that the freeholder had not actually given consent, because it was still awaiting reply to its enquiries about my Client’s accounts. [Whether the freeholder’s solicitors, in having issued a draft licence, was enough to deem consent was never resolved: that would’ve meant applying to court for a declaration, which Homebase would do provided contracts to assign were first exchanged, (on condition if the application failed then the transaction would abort)]
As the conveyancing progressed, I started thinking further ahead. Even if the freeholder were shown to be unreasonably withholding consent, I felt my Client would be off to a bad start if the landlord were ordered to consent against its will. No matter the impersonality of business tenancy law, the human aspect in the ongoing relationship between landlord and tenant is important. Then there was the question of personal surety. The underlessee has no surety, which would mean, on expiry of the head-lease when Homebase’s interest ends, and the under-lease is renewed direct with the freeholder, there would be no need for surety in future. (The under-lease is inside the 1954 Act so has renewal rights.) In the head-lease, the freeholder can require personal surety for a limited company assignee. My Client offered an associate company, but not a personal surety. Had the matter gone to court, it is possible the court would have ordered a personal surety with any licence to be granted, which would mean my Client would have been worse off.
The difference in repairing covenant could also cause problems. The under-lease contains a schedule of condition, whereas the head-lease is full repairing. The cost of the difference is estimated at £100,000, at least. I got Homebase to agree to extend the indemnity beyond expiry of the term into any holding-over period, but that benefit would only have practical effect if the freeholder were to serve a schedule of dilapidations whilst Homebase were around. There would be nothing to stop the freeholder waiting until Homebase were out of the picture before serving it on my Client. Similarly, if my Client did not want to renew, then its terminal obligation would be limited. Also, by taking on the head-lease, the under-lease could have been extinguished, losing the benefit in having the schedule of condition continue on renewal of the lease direct with the freeholder.
I concluded the risks outweighed the benefits, so I recommended withdrawing from the transaction.
I have agreed the 2003 and 2009 rent reviews at nil increase, a saving of about £87,000 pa.
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Terms were agreed in principle. At the onset, I said I should not recommend my Client instruct solicitors until the freeholder’s consent had been obtained. The head-lease contains a surrender-back clause, also I did not want my Client to incur costs unnecessarily. Homebase applied for licence to assign, a draft was submitted by the freeholder’s solicitors, and I was told by the surveyor acting for Homebase consent had been given. However, what was not disclosed until much later on was that the freeholder had not actually given consent, because it was still awaiting reply to its enquiries about my Client’s accounts. [Whether the freeholder’s solicitors, in having issued a draft licence, was enough to deem consent was never resolved: that would’ve meant applying to court for a declaration, which Homebase would do provided contracts to assign were first exchanged, (on condition if the application failed then the transaction would abort)]
As the conveyancing progressed, I started thinking further ahead. Even if the freeholder were shown to be unreasonably withholding consent, I felt my Client would be off to a bad start if the landlord were ordered to consent against its will. No matter the impersonality of business tenancy law, the human aspect in the ongoing relationship between landlord and tenant is important. Then there was the question of personal surety. The underlessee has no surety, which would mean, on expiry of the head-lease when Homebase’s interest ends, and the under-lease is renewed direct with the freeholder, there would be no need for surety in future. (The under-lease is inside the 1954 Act so has renewal rights.) In the head-lease, the freeholder can require personal surety for a limited company assignee. My Client offered an associate company, but not a personal surety. Had the matter gone to court, it is possible the court would have ordered a personal surety with any licence to be granted, which would mean my Client would have been worse off.
The difference in repairing covenant could also cause problems. The under-lease contains a schedule of condition, whereas the head-lease is full repairing. The cost of the difference is estimated at £100,000, at least. I got Homebase to agree to extend the indemnity beyond expiry of the term into any holding-over period, but that benefit would only have practical effect if the freeholder were to serve a schedule of dilapidations whilst Homebase were around. There would be nothing to stop the freeholder waiting until Homebase were out of the picture before serving it on my Client. Similarly, if my Client did not want to renew, then its terminal obligation would be limited. Also, by taking on the head-lease, the under-lease could have been extinguished, losing the benefit in having the schedule of condition continue on renewal of the lease direct with the freeholder.
I concluded the risks outweighed the benefits, so I recommended withdrawing from the transaction.
I have agreed the 2003 and 2009 rent reviews at nil increase, a saving of about £87,000 pa.
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Trowbridge - 39 The Shires
01/Oct/2008 - Trowbridge - A-Tenant
Acting for Special Occasions (Greetings) Ltd, a well-respected greeting cards retailer, I negotiated acquisition of a new lease at 39 The Shires, Trowbridge, for a term of 10 years from October 2008.
Special Occasions was a partnership with 4 shops when I first started acting for the Client. The business later incorporated and over years the company took on another 10 shops, a total of 14 branches net of short while experiences. Carterton, Cheltenham (for a while) Chepstow, Cirencester (for a short while), Fishponds (Bristol), Gloucester, Hereford, Leominster, Monmouth, Roath (Cardiff), Ross on Wye, Stroud, Tewkesbury, Trowbridge, Whiteladies (Bristol( (for a while), Witney, and Yate.
I dealt with rent reviews, lease renewals, and acquisition diligence, and tenancy matters arising, including assignments from the partnership to the company. My services came to an end after the business was sold to Cardzone, another greeting cards multiple retailer.
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Special Occasions was a partnership with 4 shops when I first started acting for the Client. The business later incorporated and over years the company took on another 10 shops, a total of 14 branches net of short while experiences. Carterton, Cheltenham (for a while) Chepstow, Cirencester (for a short while), Fishponds (Bristol), Gloucester, Hereford, Leominster, Monmouth, Roath (Cardiff), Ross on Wye, Stroud, Tewkesbury, Trowbridge, Whiteladies (Bristol( (for a while), Witney, and Yate.
I dealt with rent reviews, lease renewals, and acquisition diligence, and tenancy matters arising, including assignments from the partnership to the company. My services came to an end after the business was sold to Cardzone, another greeting cards multiple retailer.
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Surbiton
26/Sep/2008 - A-Landlord - Surbiton
Upwards or downward rent review
Many tenants, and I should imagine landlords also, probably think that where a rent review is 'upward' or 'downward' so that the rent payable after the review could be less than before, the rent is likely to go down, in the prevailing economic climate.
That may not be so. For a private investor landlord of a shop property in Surbiton, I negotiated a 10% increase in rent for a September 2008 review even though the lease contains a downward provision.
The important thing to remember is that rents are not based on what the actual tenant could afford or the actual landlord might want, but upon comparison. Where the evidence is of rents whose reviews are upward-only, a nil increase (which, as I have said before, is no evidence of a lower rent) does not mean rents have fallen. Also, it is not only another rent (pro-rata) to which a review is compared, but also the terms of the lease. When you make a comparison between an upward only review clause and an upward/downwards clause, it is reasonable to assume a tenant would be attracted by the prospect of a lease containing upward/downward clause and paying a greater rent for the premises than if the review were upward only.
So, if all the evidence is nil increase, which as I've said does not mean the rent has gone down, then in the absence of proof that rents have indeed fallen, the advantage of having an upward/downward review has a value. Which in this case I agreed at 10% more.
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Many tenants, and I should imagine landlords also, probably think that where a rent review is 'upward' or 'downward' so that the rent payable after the review could be less than before, the rent is likely to go down, in the prevailing economic climate.
That may not be so. For a private investor landlord of a shop property in Surbiton, I negotiated a 10% increase in rent for a September 2008 review even though the lease contains a downward provision.
The important thing to remember is that rents are not based on what the actual tenant could afford or the actual landlord might want, but upon comparison. Where the evidence is of rents whose reviews are upward-only, a nil increase (which, as I have said before, is no evidence of a lower rent) does not mean rents have fallen. Also, it is not only another rent (pro-rata) to which a review is compared, but also the terms of the lease. When you make a comparison between an upward only review clause and an upward/downwards clause, it is reasonable to assume a tenant would be attracted by the prospect of a lease containing upward/downward clause and paying a greater rent for the premises than if the review were upward only.
So, if all the evidence is nil increase, which as I've said does not mean the rent has gone down, then in the absence of proof that rents have indeed fallen, the advantage of having an upward/downward review has a value. Which in this case I agreed at 10% more.
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Wembley - 5 Neeld Parade
20/Feb/2008 - Wembley - A-Landlord
For the freeholder, for whom I have acted since 1978, dealing with rent reviews and leasing matters arising, I arranged sale of the freehold interest in 5 Neeld Parade, Wembley by auction, in conjunction with Barnett Ross, on 20 February 2008 - Lot 28
At the junction with High Road and adjoining William Hill, and approximately 100 yards from the southern approach walkway to the new Wembley Stadium and Wembley Stadium Station, the property is a ground floor shop with first floor rear storage, and self-contained 5KB flat on two floors above.
The shop has A3 use (restaurant/coffee bar).
Gross frontage 20'5"
Net frontage 14'9" widening to 17'2"
Shop depth 55'4"
Built depth 100'11"
Rear storage, approximately 180 sqft
The entire property is let for 20 years from 25 December 1989. The passing rent £14,000 was fixed in 1990 and no action was taken for the 2005 rent review. The lease expires in 2009.
The guide price was £350,000 and the property was sold for £595,000. In addition, the buyer paid my Client approximately £7000 for arrears of rent.
Barnett Ross has 60 years experience, I have 40. Our combined 100 years experience added-up, to quote Barnett Ross's post-auction comment: "2.4% What a price!!! Defies valuation"
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At the junction with High Road and adjoining William Hill, and approximately 100 yards from the southern approach walkway to the new Wembley Stadium and Wembley Stadium Station, the property is a ground floor shop with first floor rear storage, and self-contained 5KB flat on two floors above.
The shop has A3 use (restaurant/coffee bar).
Gross frontage 20'5"
Net frontage 14'9" widening to 17'2"
Shop depth 55'4"
Built depth 100'11"
Rear storage, approximately 180 sqft
The entire property is let for 20 years from 25 December 1989. The passing rent £14,000 was fixed in 1990 and no action was taken for the 2005 rent review. The lease expires in 2009.
The guide price was £350,000 and the property was sold for £595,000. In addition, the buyer paid my Client approximately £7000 for arrears of rent.
Barnett Ross has 60 years experience, I have 40. Our combined 100 years experience added-up, to quote Barnett Ross's post-auction comment: "2.4% What a price!!! Defies valuation"
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Pontypridd - Car Park and Bowls Centre
01/Jan/2008 - A-Landlord - Pontypridd
In Pontypridd, South Wales, is a town centre car park and bowls centres operated by the Local Council.
Acting for the Landlord, in connection with a 2008 rent review in a ground lease referred to arbitration. I acted in a supporting role to a chartered surveyor who specialises in car park rents. My role included advice on the effect of a long-lease on the review, interpretation of the user clause, and the valuation of the buildings. I also advised the landlord on the wording of a deed of variation.
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Hunstanton - 8-16 High Street
01/Jan/2008 - A-Tenant - Hunstanton
My Client, t/a Warehouse Clearance, bought the lease of 8-16 High Street, Hunstanton - formerly occupied by Woolworths - from the administrator of Woolworths.
Before contracts were exchanged for the acquisition, I advised on the terms and conditions of the existing lease so that my Client would know what it would be letting itself in for. Thereafter, I negotiated the outstanding rent review with the Landlord.
In Hunstanton, I have also advised on:
24 High Street
1 Northgate Precinct
St Edmunds Terrace
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Before contracts were exchanged for the acquisition, I advised on the terms and conditions of the existing lease so that my Client would know what it would be letting itself in for. Thereafter, I negotiated the outstanding rent review with the Landlord.
In Hunstanton, I have also advised on:
24 High Street
1 Northgate Precinct
St Edmunds Terrace
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London SE1 - 62-64 Weston Street
01/Jan/2008 - A-Tenant - London SE1
My Client t/a Champor-Champor is an award-winning modern Malaysian restaurant close to London Bridge Station.
The Landlord owns numerous buildings in the area and the proposal of £34,000 was based on its evidence.
For the 2008 review, the Lease contained a minimum uplift so I was unable to reduce the rent below that figure, but at least I made sure the tenant did not have to pay a penny more.
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The Landlord owns numerous buildings in the area and the proposal of £34,000 was based on its evidence.
For the 2008 review, the Lease contained a minimum uplift so I was unable to reduce the rent below that figure, but at least I made sure the tenant did not have to pay a penny more.
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Cheylesmore - 1-2 Quinton Parade
25/Mar/2007 - A-Tenant - Cheylesmore
Acting for a retailer in Cheylesmore, Coventry, I arranged referral of a rent review at 1-2 Quinton Parade to an independent expert and the revised rent was determined accordingly.
The Lease requires the tenant to pay all costs of the determination (the expert's fees) if the determination were within 10% of the landlord's proposal, so the expert took it upon himself to determine my Client should pay all costs. However, what the expert overlooked was a) the proposal was that which had been made at the date of the application to the RICS for the appointment of the expert and b) the expert's role in the procedure did not extend to responsibility for costs. At the date of my application to the RICS, the landlord had not proposed any rent so I reasoned the provision for costs did not apply. Also, I reasoned that apportioning responsibility for costs was a separate issue which was nothing whatsoever to do with the expert. It was an arrangement the parties had agreed would apply after the determination were released and not part of the actual determination process.
Needless to say, the landlord's surveyor did not agree but, because I stuck to my guns the expert found himself in an invidious position, so the landlord said he would obtain legal opinion. Whilst waiting for the lawyers, the landlord's surveyor sent me a memorandum for my Client to sign to confirm the new rent. I obtained my Client's signature but did not return the Memorandum to the landlord's surveyor for completion; instead I said that because the expert's determination on costs was included in the determination the entire determination was invalid pending resolution of the costs issue. I emphasised that whereas I was not going to recommend the revised rent should not be agreed, I did not think it should be payable until after the issue of costs was finally disposed of, so if the landlord's legal opinion did not agree with my opinion, I should arrange for my Client's solicitors to apply to the Court for a declaration. However, without prejudice, I offered to advise my Client to return the Memorandum for completion and pay the rent without further ado if the landlord would agree to pay half the expert's costs. The landlord realising the matter could take months to resolve, not to mention mounting legal costs, capitulated.
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The Lease requires the tenant to pay all costs of the determination (the expert's fees) if the determination were within 10% of the landlord's proposal, so the expert took it upon himself to determine my Client should pay all costs. However, what the expert overlooked was a) the proposal was that which had been made at the date of the application to the RICS for the appointment of the expert and b) the expert's role in the procedure did not extend to responsibility for costs. At the date of my application to the RICS, the landlord had not proposed any rent so I reasoned the provision for costs did not apply. Also, I reasoned that apportioning responsibility for costs was a separate issue which was nothing whatsoever to do with the expert. It was an arrangement the parties had agreed would apply after the determination were released and not part of the actual determination process.
Needless to say, the landlord's surveyor did not agree but, because I stuck to my guns the expert found himself in an invidious position, so the landlord said he would obtain legal opinion. Whilst waiting for the lawyers, the landlord's surveyor sent me a memorandum for my Client to sign to confirm the new rent. I obtained my Client's signature but did not return the Memorandum to the landlord's surveyor for completion; instead I said that because the expert's determination on costs was included in the determination the entire determination was invalid pending resolution of the costs issue. I emphasised that whereas I was not going to recommend the revised rent should not be agreed, I did not think it should be payable until after the issue of costs was finally disposed of, so if the landlord's legal opinion did not agree with my opinion, I should arrange for my Client's solicitors to apply to the Court for a declaration. However, without prejudice, I offered to advise my Client to return the Memorandum for completion and pay the rent without further ado if the landlord would agree to pay half the expert's costs. The landlord realising the matter could take months to resolve, not to mention mounting legal costs, capitulated.
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Northampton - 26-28 The Drapery
01/Jun/2006 - A-Tenant - Northampton
Acting for the occupier of 26-28 The Drapery, Northampton, the tenant had been negotiating the rent review June 2006 direct with the landlord's surveyors. The 2001 passing rent was £30,000 pa and the landlord's proposal £40,500 per annum. Following negotiations the landlord made a Calderbank offer to settle at £33,750 pa. The tenant instructed me to take over negotiations and I settled the rent at £31,000 per annum.
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Stroud - 24 Merrywalks Centre
F Hinds Ltd, jewellers, instructed me to negotiate the rent review 29 September 2000 at its branch in The Merrywalks Centre, Stroud, Gloucestershire.
The rent was £21,500 per annum and, for various reasons, the review was up or down. The Landlord's Surveyors, Johnson Fellows, offered to settle at £19,750 pa. I referred the matter to arbitration so as to present a submission to someone with no vested in the outcome.
The Award was £15,000 pa.
A saving of £6500 per annum
For the September 2005 review, F Hinds Ltd started negotiations direct with the Landlord's surveyors, this time, Alder King. The proposal was £28,500 per annum but, before I was instructed, the Landlord had offered compromise at £26,000 pa.
This time, the Landlord had applied for arbitration. A different arbitrator to last time was appointed. On my recommendation, the arbitration proceeded.
The Award was £24,675 per annum.
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The rent was £21,500 per annum and, for various reasons, the review was up or down. The Landlord's Surveyors, Johnson Fellows, offered to settle at £19,750 pa. I referred the matter to arbitration so as to present a submission to someone with no vested in the outcome.
The Award was £15,000 pa.
A saving of £6500 per annum
For the September 2005 review, F Hinds Ltd started negotiations direct with the Landlord's surveyors, this time, Alder King. The proposal was £28,500 per annum but, before I was instructed, the Landlord had offered compromise at £26,000 pa.
This time, the Landlord had applied for arbitration. A different arbitrator to last time was appointed. On my recommendation, the arbitration proceeded.
The Award was £24,675 per annum.
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Weston Favell
01/Jul/2004 - Weston Favell - A-Tenant
Acting for Nolan's Jewellers in Weston Favell Shopping Centre, Northampton, the rent was £25,500 per annum and for the July 2004 review the Landlord, The Tesco British Land Property Partnership, proposed £58,800 per annum, based on an open market new letting nearby.
(Every little helps Tesco!) To put pressure, Tesco referred the matter to an independent expert, but the matter was held in abeyance. Initially, the lowest I could persuade the Landlord to accept was £45,500 pa, but, after the freehold of the Centre was sold, I negotiated with the surveyors for the new Landlord and the rent was agreed at £35,000 per annum.
A saving of £23,800 per annum
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(Every little helps Tesco!) To put pressure, Tesco referred the matter to an independent expert, but the matter was held in abeyance. Initially, the lowest I could persuade the Landlord to accept was £45,500 pa, but, after the freehold of the Centre was sold, I negotiated with the surveyors for the new Landlord and the rent was agreed at £35,000 per annum.
A saving of £23,800 per annum
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London W1 - Piccadilly Circus
Acting for the Tenant of 8 Glasshouse Street, London W1, I negotiated the rent review 24 June 2002.
Landlord: Land Securities PLC. Landlord's Surveyors: Drivers Jonas.
The rent was £93,000 per annum and the proposal was £222,000 per annum.
The Landlord referred the matter to arbitration, but proceedings were not pursued. I negotiated agreement at £125,000 per annum.
In 2007, the lease came up for renewal but the Landlord wanted to include a break-clause for redevelopment. The Tenant consulted me on matters arising and I was involved in the negotiations with the Landlord.
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Landlord: Land Securities PLC. Landlord's Surveyors: Drivers Jonas.
The rent was £93,000 per annum and the proposal was £222,000 per annum.
The Landlord referred the matter to arbitration, but proceedings were not pursued. I negotiated agreement at £125,000 per annum.
In 2007, the lease came up for renewal but the Landlord wanted to include a break-clause for redevelopment. The Tenant consulted me on matters arising and I was involved in the negotiations with the Landlord.
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London SE18 - 71-77 Powis Street -
01/Jan/1995 - A-Landlord - London SE18
71-77 Powis Street, Woolwich, London SE18 comprises a 52,000 sqft store occupied by New Look.
I act for the superior Landlord, owner of the freehold of the front section of the property, ground leaseholder of the back section and leaseholder for 99 years of the middle section. The middle section is built on a raft over the railway tracks and the rent is a percentage of the entire property. My Client leases the entire property to Powis Street Estates which in turns sub-lets to New Look.
The 99-year lease has rent reviews every 21 years and the underlease between my Client and Powis Street Estates also contains reviews at 21 year intervals. For the 1995 review, when the store was let to Littlewoods, the review was referred to arbitration, the arbitrator was a senior partner of Jones Lang LaSalle. Littlewoods was represented by a partner of Healey & Baker (now Cushman & Wakefield). In our respective submissions, we considered rents of stores throughout Greater London. The Award was almost the same rent as I had originally proposed. For the 99-year lease review, where my landlord-Client is the tenant, other issues were involved reflecting differences in the leases. To minimise the proposed increase in rent, I researched the development history of the building including obtaining copy documents from the solicitors that had acted for the original landlord in 1974. During the negotiations, legal proceedings were initiated against the superior landlord’s surveyor for breach of warranty of authority.
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I act for the superior Landlord, owner of the freehold of the front section of the property, ground leaseholder of the back section and leaseholder for 99 years of the middle section. The middle section is built on a raft over the railway tracks and the rent is a percentage of the entire property. My Client leases the entire property to Powis Street Estates which in turns sub-lets to New Look.
The 99-year lease has rent reviews every 21 years and the underlease between my Client and Powis Street Estates also contains reviews at 21 year intervals. For the 1995 review, when the store was let to Littlewoods, the review was referred to arbitration, the arbitrator was a senior partner of Jones Lang LaSalle. Littlewoods was represented by a partner of Healey & Baker (now Cushman & Wakefield). In our respective submissions, we considered rents of stores throughout Greater London. The Award was almost the same rent as I had originally proposed. For the 99-year lease review, where my landlord-Client is the tenant, other issues were involved reflecting differences in the leases. To minimise the proposed increase in rent, I researched the development history of the building including obtaining copy documents from the solicitors that had acted for the original landlord in 1974. During the negotiations, legal proceedings were initiated against the superior landlord’s surveyor for breach of warranty of authority.
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