COMMERCIAL
AGENCY AND
SURVEYING
SERVICES

What can landlords do to make their property more attractive to tenants or buyers?

These are typically considerations that many people would consider obvious, such as:

• ensuring the property is in good repair and condition,
• making sure all compliances in place (i.e. valid EPC, asbestos register, up to date Gas Safety / Electrical Safety reports)
• ensuring there is no ambiguity on any legal matter
• ensuring service charge documentation is up to date, and all landlord’s obligations are being complied with.

What is included in a typical commercial lease?

The lease is essentially the document that sets out the rights and obligations that each party undertakes to comply with during the terms of the lease. Whilst it is not possible to provide a definitive summary (as all commercial leases are different), key features of most commercial leases can be summarised.

The lease should clearly describe the property and the parts being leased to the tenant, and those parts retained by the landlord.

It should define the term of the lease and the rent being charged (together with a provision for this to be reviewed if agreed by the parties).

It should establish the obligations of either party with regard to repair/maintenance/decoration, grant rights to the Tenant and stipulate conditions for sub-letting, assigning the lease or sharing occupation.

It should state how and to the extent that the tenant may alter the property and stipulate conditions that may be imposed.

The lease should, if agreed by the parties, detail arrangements for a break option and will clearly set out arrangements for what should happen at the end of the lease term.

What are service charges, and how are they calculated?

Service charges cover works or services provided by the Landlord in relation to areas outside the leased area of a tenant’s property, but in respect of which the tenant(s) enjoy a benefit.

This could include (but is not limited to)

1. upkeep and maintenance/repair and redecoration of the main structure and fabric of a multi-occupancy building, common areas (hallways, reception areas, landings), external areas (grounds maintenance, boundaries, parking areas, roadways, cycle/bin stores/outbuildings),
2. the provision of building services (common fire alarms, lighting, power, water, heating to common areas, drainage), staff costs (receptionist, security, building manager, janitor services), insurances.

Costs are normally set out in a budget at the beginning of a year and the lease document is clear in how each tenant’s share of the cost is apportioned.

Demands are made throughout the course of the year and at the end of the year, the building manager will reconcile the tenant’s payments (made against the budget) against actual expenditure, issuing the tenant with an end of year statement and where necessary, administering balancing payments.

Do you provide advice on lease renewals and rent reviews?

Yes. We offer a lease consultancy service to assist clients in their renewals. In addition to a team of RICS Chartered Surveyors and Registered Valuers, we also have an RICS appointed Arbitrator who offers expert determination of contentious rent reviews.

Do you provide valuations for commercial properties?

Yes – we have a team of RICS Registered Valuers at Trinity Rose who specialise in the valuation of commercial property in accordance with the RICS Valuation – Global Standards (known as the ‘Red Book’). We can provide valuations for secured lending, business acquisition and a variety of statutory taxation purposes.

Can you advise on the best commercial property investments?

Yes – our commercial agency team have a wealth of experience in advising clients on their investment acquisition of commercial properties. Contact us with details of your requirements.

How do you assess the return on investment (ROI) for a commercial property?

Commercial property yield is the annual return on investment for a commercial property, expressed as a percentage. It’s a key metric which is used by property investors to consider the likely profitability of a property investment, and is valuable in the comparison of investment opportunities. The yield can be assessed by dividing the annual rental income by the property value and multiplying the answer by 100, to arrive at the percentage yield.

How do market trends affect commercial property prices and rents?

Market trends will influence supply and demand across different property sectors, which will, in turn, impact upon asking prices. This will ultimately reflect on achieved purchase prices and rents, which will then influence comparable evidence used by valuers in the valuation of property. It is, therefore, important that market trends are carefully considered by agents and valuers alike.

What sustainability features can add value to a commercial property?

Most commonly seen in commercial properties are features such as low-energy lighting and photovoltaic (solar) panels for the generation of electricity. Retrofitting of buildings is still in its infancy, as in many cases, the long payback periods to the owner for more significant investments in the property are financially unviable.

More modern built properties are built to BREEAM requirements, which represent the highest standards of energy efficiency and sustainability, through the application of energy-saving design techniques and features, the use of recycled building materials or low carbon manufacture products, the promotion of locally sourced materials, low energy/renewable building services and the promotion of low energy transportation.

Are there legal requirements for energy efficiency in commercial properties?

The Energy Performance of Buildings (England and Wales) Regulations 2012 sets out the obligation to provide an EPC when “selling” or “renting out” a property, and The Department for Communities and Local Government subsequently set out a guidance note (2017), specifying that certain transactions would not fall within the scope of a sale/letting. Lease renewals are listed as being outside of the scope. It appears, therefore, that guidance (but not law) states that an EPC is not required for a lease renewal under EPC regulations.

The Energy Act 2011 includes EPC minimum standards requirements. From April 2018, legislative changes made it unlawful to let residential properties with an EPC Rating of F or G (i.e., the lowest 2 grades of energy efficiency).

How do you keep clients updated during the leasing or sales process?

Our agency team is focused on client communication.

We will provide regular telephone and email communication with feedback on viewings and offers.

In addition to this, we provide a sale/lease progression service whereby each line instruction will be the subject of regular calls to both parties involved in the transaction, and their respective legal advisers. In doing so, we can ensure that momentum is established and driven through the process.

We can raise any issues that crop up during the legal due diligence process at an early stage to ensure that, where relevant, the appropriate action is taken.

We also help to coordinate surveys and other assessments of the property during the due diligence state. Our service is designed to improve the efficiency of information exchanges between the parties to reduce the risk of ‘last minute’ issues arising, and keep transaction times to a minimum.

How do I contact your agency for more information or arrange a consultation?

Please contact the Commercial Agency department of Trinity Rose on 01962 888900 (Winchester) or 023 8000 2020 (Southampton) and speak to our knowledgeable and helpful team.