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Posted by hatfield on April 16, 2020
CORONAVIRUS – SOUTH WEST BUSINESS PROPERTY UPDATE 15 APRIL 2020
Landlords and Tenants Working Together in Business Lockdown
Since the business implications of Coronavirus struck we have had many, many conversations with clients and business colleagues about how to manage this sudden change in circumstances. Whether they are landlords or tenants, they are in unchartered waters.
Tenants are wondering if they should pay their rent and service charges with the media exclusively reporting cases where withholding payment appears to be commonplace, not realising that the majority of tenants are paying as normal. Landlords are trying to work out how to help keep tenants in business whilst honouring their own commitments to pay staff, to pay interest and to maintain the viability of their own businesses. Particularly in areas like Somerset, it is not uncommon for landlords to have just one or two properties and rely on the rent for their living income, often in retirement.
As we see in so many ways, this crisis has brought out the good in society, but also exposed the less attractive side of some. In our business we have seen landlords immediately offer tenants in the charitable sector a period of rent suspension so that they can continue offering valuable services needed more now than ever. In others, we have seen tenants jump on the bandwagon, just refusing to pay rent because they have heard that it is happening. There can’t be many businesses not affected by this pandemic but some are in those business sectors where products and services are suddenly in high demand and there is no reason to delay rental payments.
There is not a right or wrong outcome for all cases but one thing is clear, landlords and tenants should talk and keep in touch. Tenants need to understand that any rent not paid for now will still need to be paid in the future and most leases provide for interest to be charged. Working constructively with your landlord now, may influence future discussions when the fall-out from Coronavirus is being cleared up. On the other hand, landlords that expect the impossible from tenants will end up with empty buildings – the ones that we regularly work with are already ‘tenant focussed’ and this ethos will stand them in good stead now, more than ever.
Here are our ‘Six of the Best’ tips for landlords and tenants:
- Talk first.
- Tenants, pay what you can now, based on what is happening to your business.
- If the tenant has taken a hit in cash flow, carefully agree and record a payment timetable, dealing with interest and when it may be charged and when not.
- Landlords should look at how costs can be reduced if properties are not being used in the normal way, for example, in service charges for multi-occupied buildings.
- Landlords, be flexible about innovative ideas if tenants wish to temporarily change the use of buildings to help the business stay afloat.
- Keep talking.
And one for luck – seek advice from your commercial property advisor.
Posted by hatfield on April 9, 2019
UK High Streets have reached a ‘tipping point’, concludes a recently published parliamentary inquiry report on UK high streets.
Online sales now account for 20% of all retail sales; business rates are out of step with the rapidly changing retail world; planning policies follow outmoded trends and do not cope well with new concepts – all of these factors are impacting retailers and high streets up and down the country and across all sectors.
As concerns have intensified about the state of our high streets, the Government is slowly starting to take action with urban regeneration set to be a significant area of policy focus over the next few years. We rightly see our high streets as a vital component of the UK’s economic and social fabric. In consequence, local government, property investors and communities should be seeing this as an emerging opportunity.
Ultimately high streets need people if they are to survive and return to being at the heart of the communities they serve. It may be stating the obvious but the need to attract people back into our town centres will have long-term implications for town planners for years to come. Evidence suggests that the towns that have found it harder to adjust to the challenge from online sales are those that have tended to be overly exposed to retail. Taunton is a good example of this narrow focus that has meant that, as bricks-and-mortar shopping has declined, there has been little else to replace footfall into town centres. We hear complaints that local towns are over-run with coffee shops but urban planners are now shifting their efforts towards creating activity-based communities, moving away from the retail-centric model and bringing together a full range of amenities including shops, leisure, hospitals, residential, offices and spaces for art and culture.
Government initiatives are facilitating the move towards town centres being places of social transactions, rather than just a conduit for financial ones. There has been a key strategic message sent from central to local government: “Raise town centre population density”.
My message to local government is: “Replace rigid planning use policy with a drive towards flexibility but, above all, quality.”
We need a better quality, more focussed retail and leisure offer, not more of the same old, same old ….
Our town centres will not return to “how they used to be” and the quicker our local communities embrace change, the quicker we can generate the vibrant town centre that we would like to see. New initiatives need our support and the more we support our town centre with our contactless cards, the more innovation we will attract.
“Provide it and they will come.” In town centres, this maxim speaks as much to customers and to retailers.
Posted by hatfield on December 6, 2018
We have recently sold The Corfield Hall in Taunton on behalf of private investors. This landmark building has been sold to a local charity off a guide price of £365,000.
The Vendors. Directors of Lawrences Fine Art Auctioneers, are delighted with the sale; "with an increasing number of auction sales being conducted online both nationally and internationally, we realised that it was unlikely that we would need the hall again. the proceeds will be used to further strengthen our on-line presence and continue to develop our team of 13 specialists. The Directors are pleased that the property will be used by a local Taunton charity."
Posted by hatfield on December 4, 2018
Pedestrianisation of Taunton
A long-awaited pedestrianisation scheme in the centre of Taunton is out for public consultation but the Council has already announced a start date. The scheme will see East Street closed to all traffic except buses and cyclists, Hammet Street closed to vehicles during the day, and St James Street fully pedestrianised.
The scheme is now due to start in January 2019 in order to avoid disrupting Christmas. St James Street is a permanent arrangement whereas Hammet Street’s changes would be subject to the trial and it is not clear whether East Street plans would be on a trial basis or permanent.
The aim of the project is to make Taunton town centre more pedestrian friendly, with improved air quality and cycle routes, in line with the garden town status.
The retailers on East Street expect to see more trade with a more pleasant shopping experience on offer but people ask if the outskirts of the town will become gridlocked? There are already fewer car parking spaces in town and threats to close the park and ride services.
We think improvements to the environment are sorely needed and no scheme will keep everyone happy. But maintaining the status quo is clearly not working. Taunton’s town centre is not suffering as much as some but it is falling well behind competing centres. One strength of this scheme is that it is reversible. Bold leadership is required.
Watch this space…….
Posted by hatfield on February 26, 2017
Business Rates are in the news again – in the south west there are many winners as well as some businesses that will pay more, in some cases, much more. Media reports miss the point though – surprisingly, there are many new Rateable Values that are way off the mark but the new rules make it very difficult and slow to appeal. We only use RICS and IRRV valuers to assist our clients – watch out for the cowboy rating ‘experts’!
Posted by hatfield on February 26, 2017
Pressure of demand for industrial and warehouse units connected with Hinkley C is causing rental increases in some areas of Somerset. The market needs more supply. If this affects you, speak to us. We can use our experience and market data to ensure that you get the right deal for your business
Posted by hatfield on March 23, 2016
Budget 2016 fall out – Politicians may be interested in the spat between George and IDS but businesses will be more interested in the financial effect of the Budget measures. In the South West, with our high proportion of smaller businesses, the Chancellor’s measures on Business Rates are welcome. Small Business Rates Relief has always been popular with business owners and the new thresholds will affect a considerable number of properties. BUT … they don’t apply until April 2017 and some of the T&Cs are not yet available.
Changes to Stamp Duty Land Tax are positive for purchasers of properties with a capital value of less than £1,050,000 which will be good news for many businesses in the South West where commercial property values are far lower than in the South East and London. Changes to SDLT on leases will only affect properties where the Net Present Value calculation is £5m or above, so this will have little effect on our market overall.
So in the short term, smaller businesses can afford to welcome the 2016 Budget but, with Business Rates revenue and collection being progressively devolved to Local Authorities up to 2020 for how long will these concessions last bearing in mind that their grant from central Government tapers off? So when, finally, this tax relief is withdrawn, the local Council will take the flack, not the Chancellor – clever!
Posted by hatfield on February 10, 2016
Hatfield White welcomes Multitaction UK to Viney Court. The company designs and supplies cutting edge touch screen displays for business and educational environments (www.multitaction.com)
The company has taken suite a G1 and G2 at Viney Court totalling 1,170 ft². Viney Court has been developed by Summerfield Developments (SW) Ltd and provides a range of office and business units within a converted Victorian factory. Only one suite of offices of 460 ft² is now available to let.
Posted by hatfield on January 8, 2016
Wellington Motors – “Best of the Best”!
We are delighted to support Wellington Motors with their press feature announcing that they have recently been recognised as one of the best Nissan dealerships in the world, winning the Nissan Global “Best of the Best” Award 2015.
Hatfield White are working with Wellington Motors to improve their sites in Exeter and Wellington and have worked with them on their latest investment, expanding the business into Barnstable. Michael Finn, Group Managing Director says “Barnstable Nissan on the Pottington Business Park is one of the region’s most cutting edge car sales environments. This new showroom is a huge investment by Wellington Motors which bought into the business in 2015.” Nigel Hatfield is looking forward to seeing the finished project soon and at least we know that the rent and lease terms are right!
Posted by hatfield on January 6, 2016
Victoria House and Viney Court in Taunton continue to attract new tenants. In December we welcomed The Association of Reflexologists which has taken 1,500 ft of newly refurbished offices. More deals will follow in early 2016 ....
Posted by hatfield on January 6, 2016
Acting on behalf of private investors, Hatfield White have let 5 The Square Holsworthy to residential estate agents Howes Estates Limited. Howes Estates are expanding, opening a second office to complement their established office in Winkleigh. Their new Holsworthy office will open January 2016.
Howes Estates have taken a new seven year lease at the asking rent of £5,750 per annum.
David White, who handled the negotiations reports “following refurbishment of the building to provide residential on the upper floors and a self-contained ground floor shop, we received good interest in the commercial element. The building is now fully let and income producing for the owners”.
Posted by hatfield on January 6, 2016
LANDLORD & TENANT UPDATE – NOTES FOR 2016
After an extended period of falling, followed by static, rental value within much of the South West’s commercial property market, our experience during 2015 suggests that the default assumption that there is no reason to trigger rent reviews may be in need of resetting.
Acting on behalf of a both tenants and landlords within the retail and industrial sectors, we have seen demonstrated rental growth – location and property specific, and by no means universal – but a tangible shift nonetheless.
Fuelled by improved occupier demand, and the opportunity to review leases settled during the recessionary climate, there is now very good reason to look seriously at rent reviews once more.
Hatfield White provide expert advice on all commercial property sectors throughout the greater South West, and would be pleased to consider and advise upon forthcoming rent reviews on behalf of commercial landlords and tenants.
For further information or an informal chat, please contact David White BSc FRICS
T: 01823 353033 / M: 0796 838 0022 / E: [email protected]
Posted by hatfield on November 27, 2015
Investor demand for commercial property is due to strengthen. With the Chancellor adding 3% stamp duty surcharge to purchases of residential investment properties and apparently pursuing an agenda of taxing buy-to-let landlords and second property owners, investors may be wondering which way to turn.
Commercial property may well be the answer if you can find investment lots of quality particularly in the entry level price range.
Fewer investors feel comfortable with commercial property. Yes, void periods can be longer and further investment in the property may be required more often as occupier needs change over times but with the help of an trusted and experienced advisor potential returns can overcome the confidence gap.
Posted by hatfield on October 21, 2015
A prime site adjacent to the M5 in Bridgwater is to be developed to provide three new production and warehouse units. the first of which is already earmarked for a successful and expanding local business.
The site at Huntworth Way at the Junction 24 development will provide a total of 18,000 ft² of which 7,400 ft² will be occupied by M & J Pyne Wholesale Division to support the well known Pynes of Somerset retail business nearby.
Two units of 5,300 ft² each are available for pre-let discussions. They will feature a minimum 6.0 m of headroom with excellent loading and parking facilities. Completion of this scheme is scheduled for April 2016.
Further information is available from Nigel Hatfield (01823) 353033
Posted by hatfield on October 21, 2015
HAWKSMOOR IM MOVE TO TAUNTON
Just completed a letting at Fitzwarren House to @Hawksmorrim for their new Taunton office - opening soon.
Posted by hatfield on October 7, 2015
A private pension fund client of Hatfield White has sold the former Focus DIY unit on Wylds Road in Bridgwater to Travis Perkins Properties. The unit has most recently been trading as BUYology. A new Wickes DIY will open in 2016 following refurbishment.
Nigel Hatfield comments “This transaction is a great example of the way we work at Hatfield White. Through contacts in the London-based investment market, in 2000 we introduced our client to this property which offered a great opportunity to generate a healthy return on capital with the prospect of an uplift in value at the end of the lease. 15 years later and after 3 rent reviews, a tenant in Administration and a rare legal scenario that kept the rent flowing, the “end game” was won with an off market sale showing over 125% uplift in value. A lot of hard work but a great result!”
The skills and resources we used:
- Investment acquisition through industry contacts.
- Research of historic use archives and liaison with environmental experts to overcome funding issues relating to the potential for contaminated land.
- Rent review, using market data and settlement of a rent review dispute through Arbitration and use of a “Calderbank offer”.
- Advising clients alongside their solicitor when Focus DIY went into Administration and enforcing “Privacy of Contract” upon the original tenant to maintain rental payments.
- Pension Fund Valuations.
- Use of our knowledge of property requirements from national occupiers in the local area.
“The deal came very close to falling at the first hurdle. As many will know, the Wylds Road area of Bridgwater is a series of clay pits and former brickworks. No-one really knows what material was used to back-fill the pits so we looked at historical OS maps and even discovered aerial photos from 1946 which told us that the land in question was not an excavation site. This information enabled our environmental advisors to quantify the risk of contamination and thus bank funding of the purchase could be obtained.”
The property will be given a new lease of life under the ownership of Wickes who will relocate from their store in East Quay.
Posted by hatfield on September 16, 2015
Hawkridge House Letting
Taunton based commercial property adviser Hatfield White has arranged the letting of modern offices at Hawkridge House Chelston Business Park to the Farming and Wildlife Advisory Group (FWAG South West). The ground floor of Hawkridge House totals 1,015 ft² (94 m²) of offices with 6 parking spaces and has been let for 5 years at a rent rising to £10,000 p.a. Hatfield White acted for the owners of the building with joint agents Greenslade Taylor Hunt.
Posted by admin on September 7, 2015
TO SERVE OR NOT TO SERVE
“To serve or not to serve that is the question Whether tis nobler in the mind to suffer The risks and uncertainties of a 54 Act continuation tenancy Or to take arms against the prospect of the renewal And by serving notice, to crystallise the rent, the term? No more, and by this notice, to say we end The heart-ache and the uncertainties of commercial lease expiry”
As we continue to experience difficult conditions within the South West commercial property market, the decision over what action to take, if any, on a contractual lease expiry, remains subject to some debate. There is no “one size fits all” solution as the best course of action depends on the individual circumstances, location specific market conditions, and the terms of the expiring lease.
It is critically important to give detailed consideration to the options available and the likely consequences, whether you are a landlord or a tenant.
Please see the table on the following page which details the reasons for and against service of notice to terminate the lease by either landlord or tenant.
In a strong market with good demand, where rental levels are likely to be maintained or increasing, the landlord should consider serving notice. In a weak market with poor demand where rental levels are likely to fall, the tenant should consider serving notice. In all cases, the parties should be alive to the possible consequences listed.
In considering what action to take, both landlords and tenants should always take proper professional advice from a suitably qualified and experienced landlord and tenant surveyor who can advise on market conditions and recommend the appropriate course of action. With our experience, expertise and in-depth market knowledge, we are ideally placed to ensure you achieve the right result.