What checks did you carry out at the outset of the instruction?
- Conflict of Interest
- Ensured I was competent
How long had the unit been vacant for and why the previous tenant vacate?
- Unit had been vacant for 1 month with the previous tenant having absconded.
- The lease was forfeited on the basis of non-payment of rent.
What are the potential void costs incurred by the landlord?
- Business rates.
- Service charge.
- Utilities / bills.
- Cost for securing unit
- Vacant unit inspections.
What period of time are vacant industrial properties exempt from business rates?
6 month rates relief
What is the current poundage rate for business rates?
Standard multiplier - 51.2 pence
Small business multiplier - 49.9 pence
Where did you save your inspection/measurement notes and who else has access to the folder/s?
- Cloud based document filing system and personal files
- Line manager, Colleagues within my team, and the external property management team
Why did you undertake a desktop survey prior to attending site?
- To gain an understanding of the unit and surrounding area prior to inspecting and assess what needed to be done
- Review the EPC and any relevant certification
- Establish the boundaries of the unit, establish whether there are any demised spaces or yard
What would be the advantages of letting the unit in an unrefurbished condition?
- Negates any capex spend
- Subject to the market conditions - could result in a shorter downtime as works do not need to be undertaken
What would be the disadvantages?
- Lower rent
- More incentives required to let
- Longer period of time in which the building undergoes refurbishment
- Issues could get worse if not maintained
- Could fall behind on stat compliance e.g EPCs
What is the hierarchy of evidence regarding comparable valuations?
Set out in the RICS GN Comparable Evidence in Vals 2019
- Cat A, B and C
Or Bernstein and Reynolds handbook - OMLs, RRs, renewals, arbitration awards down to sale and leasebacks.
Unit 1 Granby Trade Park – what adjustments if any did you make for quantum here?
Not a huge amount - I wouldn’t expect a major variation from 20k to 13k but approx 1-2%. Main factor of variation was the spec and fact it was a single unit with own demised yard.
What impact if any does an EPC rating have on a property valuation?
On smaller multi let units - it won’t have a major impact
However there is evidence behind the fact larger, blue-chip occupiers will pay more for higher EPCs to align with their ESG strategies
If any of your comparables were protected leases, what adjustments would you make?
Apply a small premium - say 3-5%
What evidence is there that protected leases attract a high rate per sq ft?
Typically, protected leases come at a premium with LLs often not wanting to agree a protected lease without financial benefit
What were the ESG works considered as part of the refurbishment?
- Removal of gas heaters
- Upgrading to LEDs throughout the warehouse
- Installing a new electric heating system
How important to the landlord was achieving a B rating for the EPC?
- In-line with the wider portfolio strategy of improving EPCs and future proofing assets to ensure compliance with impending MEES regulations
What additional works would have been required to achieve an A rating?
- Look at PV or solar panels
- EV charging points
What analysis (if any) did you carry out to determine whether the capex works were worthwhile?
Worked with our analysts to undertake a Yield on Cost calculation
Yield on Cost = Net Operating Income/Total Project Cost
What disclaimers were included on the marketing brochure?
E.g believed reliable but should not be relied upon without verification
Was the UK entity a newly formed company? If so how did you carry out your checks?
It was
- I verified the IDs of the directors and cross referenced with companies house
- I undertook a D&B check on the european entity to understand their financial position and also reviewed their accounts
As well as rent, which other liabilities would the tenant have to meet and how important factor would that be in determining the suitability of a tenant and their intended use?
- Service charge
- Business rates
- Dilapidations at lease expiry (or earlier)
- Utilities
What were the conditions of the break notice under the new lease?
In-line with the code for leasing business premises 2020:
- paying all basic rent payable on any date before the break date
- giving up occupation
- leaving no subtenants or other occupiers
Did the new lease include a SoC and why yes/no?
Yes - we’d undertaken an extensive refurbishment so agreed to a SoC to protect our position once it came to dilaps claims.
What are the benefits to the landlord of a longer term-certain lease?
Longer security of income and longer WAULB
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Summary of Experience - Mandatories63
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Summary of Experience - Technicals59
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Property Management43
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Data Management15
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Ethics, Rules of Conduct & Professionalism116
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Sustainability38
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Health & Safety29
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Leasing & Letting19
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Ethics54
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Valuation31
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Conflict Avoidance, Management and Dispute Resolution9
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Case Study13
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Measurement11
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Accounting8
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Landlord and Tenant35
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Inspection26
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Red Book28
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Professional Practice Issues19
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Mandatory - Full set3
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Measurement29
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Case Study26
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Sustainability '2423
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Inspection COPY73
