Commercial Valuations, Rent Views, Lease Renewals
Most modern commercial leases in the UK contain a clause which sets out a process for reviewing the rent reserved under the lease at a given date or dates during the term of the lease. Most of these clauses are ‘upward only’, which enables the landlord to increase the rent at various intervals and thereby benefiting from any rise in the market rental value.
In the UK, commercial leases are not standard. The drafting of any given lease, and specifically the clause pertaining to rent review at the time of grant, will have an impact on the rental value. This is because the market value is set by reference to a ‘hypothetical’ lease which is defined by the rent review clause.
In this procedure various legal notices may need to be served, time may be of the essence and careful attention needs to be paid to numerous aspects of the negotiations, not least the definition of the proposed new rent. In most cases the parties are represented by agents or surveyors representing both sides and each professional will argue the case on behalf of a client, using negotiating skills, their experience of the market and researched comparable evidence to back up their position.
If agreement cannot be reached between the parties, then the matter may be referred to an independent third party acting as an Arbitrator or Independent Expert. This will then require formal submissions to achieve an Award, potentially taking into account each party's claim for costs.
The commercial division of Hurford Salvi Carr has the ability to research and analyse appropriate comparable evidence and our commercial property surveyors and agents have the experience to provide a full service to handle Rent Review negotiations for either Landlords or Tenants.
Commercial Lease Renewals
While it is recommended to appoint a commercial property consultant to negotiate the renewal of any commercial lease, when that lease is within the security and tenure provisions of the Landlord and Tenants Act 1954, it is critical to appoint a commercial property advisor who has access to the necessary comparable evidence and is also well versed in the legislation.
The initial part of the process is similar to Rent Review negotiations as described above, but in the case of Lease Renewal the parameters are set by Law and ultimately, in the absence of an agreement between the parties, the matter may be referred to the County Court. Hurford Salvi Carr can offer a full Lease Renewal service for either landlords or tenants.
Commercial Property Valuations
Basic valuation work is undertaken by our commercial valuation team but where reports are required for commercial and mixed-use investment property and development sites these can be undertaken by our commercial division who will liaise closely with the instructing party enabling clients to add independent advice within the context of their business plans.
Our surveyors can prepare schedules of dilapidation, schedules of condition and schedules of work particularly relating to conversion and refurbishment schemes. Please contact us for further information.
Real Estate Development starts with the feasibility analysis. Hurford Salvi Carr specialise in preparing such analyses on commercial, residential and or mixed-use development schemes working closely with developers, architects, and other professionals to calculate residual land values, gross development values, and profitability.