In the latest installment of Insider’s Property Perspective Q&A series, Stuart Harris was asked to comment on the South East property market.
As head of the Cambridge office, he discussed how office space remains in strong demand, how the industry is adapting to changes in investor perceptions and the key obstacles to development. The following questions were asked and answered in full throughout the article, below is a snapshot of detail.
In what sectors (residential, industrial, office, leisure) do you see the highest demand for new space and why?
‘Online retail habits are well documented, and have been for some time, but we see this feeding strong continuing demand for industrial space.’
What are the key industries that are diving demand for property?
‘Technology, innovation and biomedical industries are affecting demand across many property sectors…’
What changes to legislation do you want to see in the coming years?
‘Green belt legislation is having a stifling effect on the scope for continued investment in progressive cities such as Cambridge, where pioneering industries show a great appetite to grow within clusters.’
What future changes to the industry do you see making a significant impact on your business?
‘The industry is adapting to changes in investor perceptions and a realignment of the scenery in the built environment.’
How much of a role should the market/local authorities play in development?
‘Increasingly, there is scope for local authorities to participate and lead development through the creation of partnerships between the public and private sectors.’
What are the key obstacles for more development and how can they be overcome?
‘With confidence growing in relation to the long-awaited resolution of Brexit, the adoption of more progressive attitudes towards planning and taxation would assist in removing obstacles.’
How can areas away from the main motorway corridors and urban centres become more attractive to investors?
‘Investors are telling us that town centres under pressure can still provide attractive yields, particualrly where risk can be mitigated by the delivery of a greater degree of mixed-use…’
For the full article follow the link to Insider Media here, published on 31 January 2020.
Samantha has recently joined the Manchester town planning team as a planner. She has dealt with a range of projects across the UK that require the preparation of documents such as planning statements and covering letters, negotiation with various consultants and planning officers as well as submitting planning applications.
She is able to offer honest and expert planning advice that is tailored to the client’s needs and aspirations. Samantha works directly with the client from the initial site appraisals through to achieving planning permission.
She is well equipped with Urban Designing skills and very good with numbers, she is able to translate and communicate technical information easily. The skills also enable her to offer creative design proposals that can be integrated effectively with the surroundings.
Third-party logistics operators (3PLs) are gobbling up warehouse space like there’s no tomorrow. They account for 35% of all spaces transacted in 2019 – massively up on the more typical 19% share they have had in recent years, according to Savills.
Online retail has been growing steadily and now accounts for close to 20% of the overall retail market…it is difficult for retailers to stay on top of everything and to be periodically investing in this software or that racking system, agrees Colin Steele, partner and head of business space at property and planning consultancy Rapleys.
The sheer uncertainty retailers dace is a further factor inducing them to limit their longer-term commitment and to instead rely more on 3PLs, says Steele. Typically, 3 PLs look for commitment of up to three years, with break clauses, he says.
‘Shorter leases are what the market was wanting anyway and the 3PL approach is an extension of that trend,’ he adds. ‘Retailers are finding it difficult to justify signing up for 10-year plus leases. Even three years is a longer-term position for them now.’.
Onerous lease commitments on balance sheers are a further disincentive for financial directors in retail and manufacturing. ‘If a property becomes surplus, you have to make provisions for the full liability of the lease,’ explains Steele. ‘On some buildings, that can blow a massive hole in someone’s P&L. It’s a major mind-focuser for finance directors.’
However, given the significant demand for space, landlords are in a position to resist demands for shorter-term leases, says Steele, further strengthening the hand of the 3PLs and encouraging their customers to grow their business with them. ‘If anything, I think lease lengths have been edging out and incentives have been shortening.’
‘Another factor in the 3PLs favour is that traditionally logistics requirements tend to come up very quickly in what is a relatively short procurement window. There is a temptation to give the problem to the 3PLs to sort out.’
Growth begets growth. The 3PLs’ greater buying power and familiarity with landlords and developers means they can do multiple deals as well as fast-track construction. ‘Development has been been as quick,’ says Steele. ‘You have very slick procurement now.’…
For the full article go to Property Week (27/09/2019).
Dan joined Rapleys in July 2018 as an Associate in the town planning department.
Since graduating from the University of the West of England in 2007 Dan has worked for RPS and Walsingham Planning (Ian Jewson Planning until a merger in 2016). He became a Chartered Town Planner in 2009.
Dan has a range of experience in different areas of planning, with a particular focus on residential and residential-led mixed-use developments. His areas of expertise include planning appraisals, applications, appeals and development plan promotions. He also has significant experience in co-ordinating multi-disciplinary teams and the preparation of Environmental Statements.
Rapleys’ Building Consultancy Group is pleased to introduce the most recent Associates’ to join the team.
Adam Reed, Bristol
Adam is a commercially driven chartered Building Surveyor who joins the team with a wealth of experience across a broad spectrum of building surveying services. Having a strong working knowledge of the regional market, and notably being a member of the BCO NextGen Committee for the South West region, will prove invaluable for the Bristol service line within the national Building Consultancy Group.
Adam is adept at providing the full range of commercial building surveyor services to clients including; technical due diligence, dilapidations, contract administration and CDM advisory. Recent projects have included CAT A office refurbishment and industrial contract administration. Each project has been approached professionally and client relationship management always prioritised, ultimately providing reasoned commercial advice and added value to each project.
Adam comments: ‘I am looking forward to getting involved in the wide-ranging projects and services that the whole Building Consultancy Group delivers at a national and regional level. My move to Rapleys comes as they go from strength to strength in the market and I am confident I can add further to the growth of the team and services.’
Jack Downing, Birmingham
Jack joins the Land Development Project Management service line within the Building Consultancy Group. This move follows experience leading the design and delivery of primary infrastructure on a range of mixed use developments nationally.
Bringing over ten years’ experience in infrastructure engineering, Jack is a qualified member of the Institution of Civil Engineers, and has managed numerous land development and building schemes. With a strong track record in value led and outcome based design, Jack has a keen eye for delivery strategy whilst keeping a firm grip on the detail to ensure risks are managed and opportunities are realised.
Jack comments: ‘I am exciting to join the team and I feel there is a significant opportunity to build and expand our offering to clients. I am very much looking forward to playing a key role in residential and mixed use development sites and making use of Rapleys’ full range of property services. Delivering a client focused service has always been at the heart of my approach. I do this by investing the time to understand the client’s key drivers so I can ensure these are achieved and I will continue this as I progress here.’
Justin Tuckwell, Head of Building Consultancy, comments: ‘I am delighted to welcome both Adam and Jack to Rapleys. Their talent and skillsets were carefully considered to enable a continued, and improved, service to our clients. I am excited to support their careers and develop their skills. I am confident that with their combined experience and proven service delivery our position will be further strengthened in the market as the Building Consultancy Group continues to expand.’
Following graduation from Nottingham Trent University, Adam returned to Barker Storey Matthews for a year working in the agency team across all sectors. Adam moved to London in 2014 to join ES-Group, who was later acquired by Lambert Smith Hampton working within the valuation consultancy team, concentrating predominantly on south east of England residential led developments. In 2015, Adam qualified MRICS and later in the year joined GVA to work in the Industrial Agency team dealing with warehouse/industrial property within Greater London and the south east of England.
In 2018, Adam joined Rapleys’ to join the Business Space Agency team dealing with warehouse/industrial and office property throughout the UK.
The department specialises in acquisition and disposal programmes on behalf of multiple occupiers such as Lok’nStore Group plc, Johnston Press plc and Siemens plc amongst others. Business space agency is also active in the development sector and has completed several industrial, trade counter and mixed use schemes in the south east of England.
Tony joined Rapleys as a partner in the town planning department in January 2018. Before joining the team, Tony headed up the Regional planning teams at GL Hearn. Prior to this he was Head of Planning at the RPS Bristol. Tony has well over twenty years’ experience as a professional planner, with the last seventeen years spent in consultancy.
Tony has advised a wide range of private and public sector clients across a variety of sectors and has acted on a number of high-profile planning projects including:
- DP World London Gateway Container Port for Shell and P&O Ports
- Barton Farm 2,000 dwelling urban extension to Winchester for CALA Homes
- 2,500 dwelling Hunts Grove urban extension to Gloucester for Crest Nicholson
- Major leisure, retail and tourism proposals extending to 500,000 sq ft for Aviva and the Eden Project
Tony has advised major home builders such as Crest Nicholson, Bovis Homes, Barratt Homes, Persimmon Homes, Linden Homes and CALA Homes. He has also advised regional home builders such as Redcliffe Homes, developers including Gallaghers, Heron Land and Places for People, and public sector bodies such as Severn Trent Water Ltd, Thames Valley Police Authority and the Association of Chief Police Officers.
Tony is an experienced expert witness having acted on behalf of clients at major planning inquiries and examinations in public across the country. He has significant experience in successfully managing and leading multi-disciplinary teams on a wide range of major projects with a particular focus on large scale residential schemes.
Oliver joined Rapleys in August 2017 as a member of the Building Consultancy team and has a broad range of experience across all areas of commercial building surveying. His main focus is on dilapidations, pre-acquisition surveys and project management.
Oliver has undertaken pre-acquisition surveys on a wide range of properties and project managed office refurbishments and landlord works in shopping centres.
- Prominent roadside opportunities
- Existing estates with asset management potential
- Vacant or part vacant roadside buildings
- £1,000,000 to £10,000,000
- Funds immediately available
- Portfolios of up to £25,000,000
Contact: Alfred Bartlett | 07738 090 760
Richard is a partner in Rapleys’ town planning team. He has extensive commercial and residential sector knowledge and experience, gained within a variety of both public, private and client side roles.
Richard has worked with a wide range of national clients, particularly in the convenience retail sector where he is currently managing the Lidl portfolio. He has successfully obtained planning permission on appeal and embarked on a number of informal hearings resulting in a successful outcome. Richard’s extensive experience and interest in S106 negotiations, viability, CIL and planning policy give him a complete understanding of the best way to secure planning permission.
Richard has expertise in securing planning permission for major complex planning applications and high profile schemes. He specialises in guiding and developing tough planning strategies for schemes often requiring significant community and public engagement.
Richard is highly focused, fostering a good work ethic to motivate his team towards the successful execution of shared objectives and engaging with the local community to address planning issues.
- Wolverhampton and Stourbridge
- 5,000 – 7,500 sq ft plus yard
- Good quality workshop accommodation
- Designated yard
- Within close proximity to arterial road
- Freehold or leasehold
Contact: Stuart Lobb | 07831 099095
- Good quality industrial accommodation
- Hamilton and surrounding area
- 5,000 to 8,000 sq ft
- Secure yard with good accessibility
- Freehold or leasehold
Contact: Donald Brown | 07467 955284
Rapleys’ property and planning consultancy continue to deliver on their ambitious business development plan with the announcement of the latest office move for the Edinburgh team.
The team moves to Rutland Square this week, after a decision was taken not to renew the lease in Caledonian Exchange. The move provides Rapleys with superior accommodation that better suits their needs as well as a growing client base. By stepping over into EH1, Rapleys are at the centre of the commercial property market in the city and ultimately their valued clients will benefit from this accessible and vibrant location.
The key service lines offered from this hub are Town Planning, Corporate & Investor Management, Business Space, Retail & Leisure and Automotive & Roadside. With local knowledge and national insight from the wider network of offices the professional teams provide comprehensive property and planning solutions on a value-added basis consistently.
Colin Steele, Partner and head of the Edinburgh office, comments: “this move comes at a great time as we continue to expand the team and service lines available here from our Edinburgh hub. On a wider practice level, the last 12 months have seen many of our regional offices move up and on to better spaces, improving the environment for the benefit of colleagues and clients alike. It is great to align ourselves to the overall business development plan and we will continue to offer the excellent, local services that our clients value us for, from this new location.”
Robert Clarke, Senior Partner adds: “I am delighted with the new office space at Rutland Square. It is a recognised and established business address in the heart of the city. Needless to say, we look forward to welcoming clients to, and advising from, our new home in Edinburgh.”
Full contact details for Rapleys Edinburgh
0370 777 6292
Property and planning consultancy Rapleys announces the launch of a new office in Cambridge. The new office is Rapleys’ second in Cambridgeshire, with the firm being founded in Huntingdon and maintaining a strong presence and heritage in region since 1951.
The Cambridge office consists of both professional advisory and transactional teams from across Rapleys’ service lines, delivering a joined-up, multi-disciplinary offering to clients in the region. Each team consists of professionals who live and work in the city, with strong established relationships across Cambridge’s range of complementary consultancy services.
Stuart Harris has been appointed Head of the Cambridge office, and joins Rapleys with more than 30 years’ experience working in the industry and region, including roles with Strutt & Parker and Carter Jonas.
Stuart, alongside the existing partnership, will be responsible for promoting and coordinating the delivery of the firm’s core property consultancy and town planning services in the city, including: Town Planning, Building Consultancy, Development, Affordable Housing & Viability, Commercial Agency, Landlord & Tenant and Investment.
Robert Clarke, Senior Partner at Rapleys, commented: “Our new Cambridge office, alongside the appointment of Stuart, represents a key further stage in Rapleys’ evolution, which builds on our long-established heritage, presence and reputation in the region going back to the founding of the firm in Huntingdon in 1951. We saw a real opportunity in Cambridge, which is undergoing substantial growth, and a market opening where we can bring in services – such as Affordable Housing and Viability, Strategic Land, Building Consultancy and Town Planning – which are currently underrepresented in the region or are subject to increasing demand. At the same time, our expanded footprint and capacity in the region further complements our national expansion programme – providing clients access to partner-led teams with both local expertise and UK-wide reach.”
Stuart Harris, Head of the Cambridge Office at Rapleys, added: “Principally I am delighted to join Rapleys at this exciting juncture. There are significant opportunities in Cambridge, which is rapidly increasing in commercial importance and is one of the fastest growing cities in the UK. This looks set to continue – not least driven by the wider strategic plan for the region including the Cambridge-Oxford arc and expressway – and we are seeing an increasing demand particularly for planning and consulting services from businesses seeking to capitalise on this growth. I look forward to working with the wider Rapleys team to help clients seize these opportunities.”
Rapleys’ Cambridge team can be contacted at 20 Station Road, Cambridge CB1 2JD / 0370 777 6292.
- Land suitable for vehicle storage
- Cambridge/Peterborough/Bedford triangle
- 5 – 10 acre sites
- Surfaced/secure sites
- Close proximity to major A roads
- Freehold or leasehold
Contact: Daniel Cook | 07795 660259
- Industrial property
- Giffnock / A77
- 8,000 – 12,000 sq ft
- Good accessibility
- Secure yard preferred
- Leasehold preferable
Contact: Donald Brown | 07467 955284
Wakako is a senior associate in Rapleys’ town planning team and has advised on a wide range of planning projects involving commercial, leisure, retail, residential and mixed use commercial developments. Her experience includes the project management and co-ordination of multi-disciplinary teams in a number of planning applications and appeals, as well as providing advice on the policy formulation process in protecting and promoting clients’ interests.
She has represented clients at appeal hearings and assisted the expert planning witness in giving evidence at a major inquiry, as well as providing assistance in support of various large scale mixed use regeneration schemes. She has also negotiated with various agencies and stakeholders through a number of complex planning applications and has represented clients at Local Plan examination hearings.
Wakako joined Rapleys in 2006 as a graduate planner and was promoted to senior associate in 2015.
Tim joined Rapleys in 1999 and was elected as a partner in 2008. He is an RICS Registered Valuer, member of the Chartered Institute of Arbitrators and is a member of the President of the RICS Panel of Arbitrators and Independent Experts and regularly receives third party appointments.
He advises both landlords and tenants upon lease consultancy matters and also provides valuation advice to clients.
Tim is involved with a wide variety of property types including retail properties ranging from high street shops to large out of town food stores, retail warehouses, drive-to and drive-thru restaurants, as well as industrial, warehouse and office premises throughout the UK.
Steven is a partner in the business space team and has wide-ranging commercial property experience. He has professionally represented a range of institutional landlords, national tenants, private individuals and banks. He is also a RICS Registered Valuer.
He specialises in all aspects of lease consultancy work including the negotiation of rent reviews, lease renewals, lease regears and the preparation of Expert Reports for use in Arbitrations and Court proceedings.
Steven joined Rapleys in 2003 and was elected as a partner in 2011. Prior to joining Rapleys he worked at Luton Council and Lambert Smith Hampton and has over 26 years surveying experience.
Stacey has worked for Rapleys since 2001, starting out as an office administrator and working in various secretarial and administration roles within the company before starting work in the rating department in 2005.
Since then she has gained good knowledge of business rates and in 2008, decided to take the opportunity to further her career and undertook a distance learning course in Surveying Practices.
In 2010 Stacey was awarded her Diploma in Surveying Practices.
Her role now includes dealing with professional casework, such as appeal recommendations and negotiating rating appeals on behalf of our clients, as well as being head of administration for the department
Simon joined Rapleys in 2002 as a graduate building surveyor and is now a partner in building consultancy. He has experience in all property sectors with particular specialism within the railway, industrial and residential sectors.
He also specialises in residential dilapidation matters and leads multi-disciplinary teams in the preparation and negotiation of complex dilapidations claims for bulk rented housing estates.
Simon is an Incorporated Member of the Association for Project Safety and has experience in all matters of Health and Safety Consultancy. He has acted as CDM co-ordinator and more recently as principle designer on large scale commercial and residential construction projects.
He is experienced in developing bespoke forms for tablet based, electronic data capture and in running projects to undertake detailed surveys of property portfolios in excess of 600 properties.
- Showroom requirement
- West London & Home Counties
- 10,000 – 15,000 sq ft
- Short term let
- Retail clearance warehouse
- A1 retail use required
Contact: Russell Smith | 07790 550460
- M4 corridor – Bristol to Slough
- 10,000 – 20,000 sq ft
- Basic building
- Ideally with self contained yard
- Leasehold only
Contact: Colin Steele | 07860 749034
Neil is a Partner in Rapleys’ town planning team and is passionate about providing clear, commercially informed planning advice to his clients.
He has an extensive knowledge and understanding of the planning system gained during more than 15 years experience within private sector planning consultancies in London, Leeds and Manchester. In this time, Neil has successfully advised clients in the private, public and voluntary sectors.
Neil has specialist knowledge and experience in the residential, retail, automotive and roadside, office and healthcare sectors. He has a proven track record in managing complex planning applications and appointing and leading large, multi-disciplinary consultancy teams on behalf of his clients. Neil is confident in leading negotiations with local authorities and key stakeholders. More recently, Neil has successfully represented clients at appeal as an Expert Witness.
Completed and current projects include:
- Redevelopment of the former British Sugar factory site in York to provide over 1000 new homes, educational facilities and public open space
- Redevelopment of a previously developed Green Belt site in Greater Manchester to provide approximately 85 new family homes
- Redevelopment of an out of centre brownfield site in Leeds for retail and car showroom units totalling 90,000 sq ft
- Redevelopment of a key City of London site to provide a new 50,000 sq m headquarter office building
- Development of a headquarter office building in the Green Belt on behalf of a international pharmaceuticals company
Alex has gained experience in all mainstream areas of commercial building surveying with a focus on condition surveys, defect diagnosis, contract administration and project management of both new build and refurbishment schemes.
Alex has specialised in the project management of large programmes of refurbishment, repair and fit out for a variety of high street retailers.
Having gained NEBOSH qualifications in Occupational Health & Safety, Fire Safety & Risk Management and Construction Health & Safety, Alex is experienced in acting as a CDM advisor, principal designer and advising on Construction Health and Safety matters, Fire Safety matters and the preparation fire risk assessments.
Alex was promoted to partner in 2018 after joining Rapleys in 2014.
Lisa joined Rapleys in July 2013 as a surveyor specialising in managing property portfolios on behalf of landlords.
Promoted to senior associate in November 2017, Lisa has over 11 years experience in managing a diverse portfolio of offices, shops, industrial, leisure complexes and residential properties on behalf of a major landlord and landowner in Hertfordshire as well as number of other landlords across the country.
Lisa is now head of landlord services and through dealing with new lettings, property management, service charges, asset management, L&T issues and land acquisition ahead of a compulsory purchase order, is well placed to provide clients with an exceptional level service ensuring that property risks are minimised.
Jonathan is a senior associate and has a wide range of experience across a number of property sectors including residential, retail, commercial, and automotive & roadside development.
The work he has undertaken includes the project management of major planning applications, planning appraisals to assess the development potential of sites, the identification and promotion of strategic land sites, and planning appeals.
He has experience advising a wide range of clients including national retailers, house builders, asset managers, private developers and corporate clients.
Jonathan joined Rapleys in 2012. He previously worked for North-West based planning consultancy NJL Consulting LLP.
Jason is a partner in Rapleys’ town planning team. Since joining Rapleys, Jason has submitted and negotiated a wide range of planning applications, including retail, motor trade, residential and public transport infrastructure. To support such proposals, Jason has prepared retail, design and general planning statements.
Jason has undertaken numerous site analyses and appraisals, and provided planning advice in relation to site disposal. He has also been actively involved in public consultation exercises promoting development, particularly public exhibitions.
Jason has given planning evidence at public enquiry, has provided expert planning witness advice and has promoted development at examinations in public.
Jason was educated at Stowe School and University College London. Since graduation in 2000, Jason spent three years gaining experience within the construction/refurbishment industry. Subsequently Jason worked for two years in contract work as a development control officer for a number of local authorities in the north-west London area, dealing with a wide range of planning applications from minor to major, and contributing to the London Borough of Ealing petition in respect of the Crossrail Bill.
James is a partner in the building consultancy team and has a broad range of experience across all mainstream areas of commercial building surveying.
He specialises in management of refurbishment projects, preparing and negotiating dilapidations claims on behalf of both landlords and tenants, undertaking pre-acquisition and technical due diligence building surveys and advising on Party Wall matters in both residential and commercial schemes.
James has project managed refurbishments valued in excess of £8million and negotiated numerous large dilapidations claims on behalf of various clients ranging from pension and investment funds to top global brands. James has also acted for both Building and Adjoining Owners regarding complex party wall schemes and undertaken building surveys on various prestigious commercial properties ranging from small scale to hundreds of thousands of square feet in size.
Dave has substantial experience in commercial building surveying advice, particularly in respect of the repair and maintenance obligations and strategic dilapidations advice for property owners and occupiers, including the preparation of planned preventative maintenance programmes.
He is an expert in preparing and negotiating dilapidations claims, pre-acquisition due diligence advice for freehold and leasehold properties, and strategic planned preventative maintenance/lifecycle cost advice. He also has extensive experience of monitoring developments on behalf of funding institutions, project management and contract administration of maintenance alterations and refurbishment fit out works as well as construction health and safety advice (CDM).
Prior to joining Rapleys in 1993, Dave worked across a range of developments in both Central London and the regions at a city based, multi-disciplinary practice.
Dave was elected a partner in 2000.
Claire joined Rapleys in 2002 bringing 15 years experience in the IT service provider industry to the business, having predominately worked in IT solutions and database administration.
Claire is a principal surveyor delivering services across a number of commercial portfolios and leads the database management for all corporate clients. She has led the set-up of databases and extranet portals for various key clients. Claire delivers high quality account management and is a superb communicator whose focus is on maintaining open and positive relationships with clients, tenants, occupants and landlords alike.
Heading up Rapleys’ TRAMPS database management, Claire deals directly with IT, property accounting and service charge management in corporate real estate services.
More recently she has developed Rapleys’ new facilities management service offering.
Chloe joined Rapleys in 2013 after graduating with a Masters in International Planning from the University College of London. In 2016, she gained her town planning chartership and is now an Associate working within a range of sectors including automotive and roadside, industrial and distribution, office, residential and retail. Specifically, Chloe is also responsible for overseeing planning matters on a portfolio of sites on behalf of BP Oil (UK) Ltd.
She specialises in development management, completing site appraisals, policy representations, planning statements, and preparing and managing planning applications and appeals. Over the years, Chloe has been able to establish beneficial working relationships with technical sub-consultants which have provided her clients with cost savings. Notable clients that Chloe has worked with include Associated British Foods, Bellcross Homes, BP Oil (UK) Ltd, Frontier Estates Ltd, Linden Homes, Lookers Plc, and The Jockey Club.
Chloe can offer carefully considered professional consultancy advice and has extensive experience in recruiting for and leading on project teams to promote and protect her clients’ interests.
Alan has many years experience in dealing with rating valuations of all types of commercial property from both the public and private sector.
Alan has appeared before the Valuation Tribunal on many occasions, acting as Advocate and Expert Witness.
Having worked extensively on both sides of the rating fence, Alan has a thorough understanding of the complexities of rating and the various ways that clients’ rates liabilities can be minimised.
Alan joined Rapleys in 2006, having previously been a partner at Fuller Peiser and a director at Evans & Payne from 1989 until he left in 2006.
Alun is responsible for a wide range of development related issues, including urban regeneration projects, site disposals, site acquisitions for property developers, development audits/appraisals and agency advice. He has considerable experience in setting up joint ventures.
Alun has extensive knowledge across all sectors of the market including residential disposals and acquisitions, food and non-food retail schemes, industrial and office developments and in particular has been involved in a number of major mixed-use developments.
Alun joined Rapleys in 1997 and was elected a partner in the development team in 2000. Prior to this he worked at Railtrack Property and the British Rail Property Board.
The Minimum Energy Efficiency Standards (MEES) regulations come into force in two months’ time. From 1 April 2018, commercial properties must have a minimum Energy Performance Certificate (EPC) rating of ‘E’ or above in order to be let. The MEES regulations will apply to the renewal of existing leases and may also have an impact upon future lease events, such as rent reviews and break options occurring after 1 April 2018.
The changes in MEES regulations are likely to affect property owners and existing tenants throughout the UK. So, to minimise the impact, forthcoming lease event dates for any sub-standard property should be identified quickly.
Firstly, landlords would be well advised to ensure that lease renewals for properties with an ‘F’ or ‘G’ rating are completed before the MEES regulations become mandatory on 1 April 2018.
Landlords should also ensure that new leases restrict a tenant from obtaining a new EPC, other than for when one is actually required i.e. in connection with an assignment or the grant of a subletting. This is because a new ‘F’ or ‘G’ rated EPC obtained by the tenant may place an obligation upon the landlord to carry out improvement works in order to bring a sub-standard property up to the minimum ‘E’ rating. Equally, landlords should ensure that sufficient rights are reserved in new leases to enable them to enter the premises in order to carry out any works that may be required.
Where existing leases contain breaks which may be effective after 1 April 2018, we would advise landlords to establish that the EPC rating of the property is ‘E’ or above. Again, if this was found to be sub-standard it would place an obligation on the landlord to carry out improvements to enable the property to be re-let. Tenants will no doubt appreciate that this situation could also assist them during negotiations with the landlord over whether or not to exercise a break.
For ‘F’ or ‘G’ rated properties that are subject to rent reviews occurring after 1 April 2018, whilst a letting might not be possible in the real world without energy efficiency improvements being carried out, a number of questions may arise in the hypothetical world of the rent review:
- Where the lease provides an assumption that the tenant has complied with its covenants and/or statutory obligations, this would effectively result in an assumed increase in the EPC rating to ‘E’. In this case, the landlord of a sub-standard property may seek to achieve a higher rent than that which might ordinarily be possible.
- A tenant may argue that the rental value should be reduced because the landlord will not, in reality, be able to let a sub-standard property.
- Where the cost of energy efficiency improvements carried out by the landlord is recoverable through a service charge, the tenant may seek to adjust their rental bid to reflect this situation.
It is therefore essential for both property owners and tenants alike to consider the impact the MEES regulations will have on future lease events.
Rapleys can help with this and if you require any further information, please contact Tim Holt.
Following graduation from Paisley College, Colin spent four years in general commercial practice in Glasgow before joining Rapleys’ Huntingdon office to specialise in automotive & roadside related agency throughout the UK and Ireland.
In 1997 Colin transferred to Rapleys’ London office to head business space agency dealing with warehouse/industrial and office property throughout the UK from the West End and our national office network.
The department specialises in acquisition and disposal programmes on behalf of multiple occupiers such as Lok’nStore Group plc, Johnston Press plc and Siemens plc. Business space agency is also active in the development sector and has completed several industrial, trade counter and mixed use schemes in the south east of England.
Colin was elected a partner of Rapleys in 1992.
After many years of warehousing/distribution being a humdrum, low growth sector of the market, it has been experiencing a lot of change over the past 2 to 3 years.
Recently we have seen:
- Bigger “mega” sheds commonly >500,000 sq ft and some 1m+ sq ft being developed
- Buildings getting taller with commonly 15m+ eaves and often 20m+
- Longer/thinner cross-docked buildings with low site density for delivery/parcel operations
- Environmentally friendly sheds with green/living roofs, photovoltaic roofs/elevations, wind turbines, water harvesting and low carbon components
- Quicker developed sheds in c35-40 weeks on enabled plots
- Sheds with greater elements of automation/handling/delivery systems
These developments have been driven by occupiers seeking greater efficiency in their distribution networks to reduce their costs and carbon footprint to meet the demands of their customers.
At the forefront of this has been the prodigious growth of internet/direct sales activity which includes the pure on-line operators, such as Amazon, and also the e-tail arms of traditional food and non-food retailers as they compete with each other for market share and defend their market presence against the march of the new entrants.
Last mile delivery
The various delivery formats all have speed and efficiency at their core but also have distinct offers such as click and collect in-store or at a pick up point, next day home/office delivery and returns. All of these require an element of “last mile” and quick access to customer markets which dictates a need for smaller satellite sheds in urban fringes being fed by large national or regional hubs located on strategic motorway junctions.
One of the major issues facing the market has been a lack of land supply in these urban and metropolitan fringe locations. The supply of employment land has been squeezed by other competing uses and particularly by residential use which has the advantage of a strong political will for more housing development nationally.
Securing strategic sites
This has played into the hands of the key logistics developers such as SEGRO, Goodman, ProLogis, IDI Gazeley and others who had the foresight to secure strategic sites throughout the national trunk road network and take these through the planning and enabling process. They are now well placed to respond rapidly to the evolving demands of occupiers. In previous development cycles there was vastly more speculative development undertaken, but scarred by the large number of buildings remaining void for years after the financial crash, the market, particularly in the 100,000 sq ft + bracket, is more of a build to suit one nowadays.
This has led to minimum lease lengths pushing out to 10 or 15 years, tenant incentives such as rent free shortening significantly and rents showing the most sustained period of growth ever recorded.
What’s next on the horizon for the market?……..greater automation including autonomous vehicles and drone deliveries….and perhaps underground sheds?
“An investigation into investment schemes has harmed [the self-storage sector], but more mature investors aren’t spooked” – Andrew Stone, Property Week.
Property Week’s self-storage supplement looks into the image problem the sector has as The Serious Fraud Office (SFO) investigates aggressively sold self-storage investment schemes.
Rapleys’ Colin Steele, partner in the Industrial and Logistics team, comments in the article:
“Larger companies and more sophisticated financial investors are seeing past [the bad reputation]. They operate on a different set of models and calculations and they are looking at excellent returns.
In the long term, this will be a storm in a teacup. The longer-term strength of the industry is there for all to see. Self-storage sites can get up to 80% to 90% occupancy, offer strong visible cash flows and good yields and are recession resilient.
The main challenge facing the industry now is finding suitable sites.”
Read the full Property Week article online here.
Property Week 14/02/2017
These days even die-hard Luddites are shopping on their smartphones. Technology is transforming the way people buy goods and that is transforming the logistics sector.
Rapleys Partner Colin Steele looks comments on how the logistics sector is becoming increasingly affected by technology and how the industry is reacting to these changes.
To read the full article please click here
More permitted development on the way
Further changes to permitted development will come into force on 6 April, the most important being:
Office to residential
As previously announced, the right to change the use of most office space to residential without planning permission is to become permanent. It will continue to be subject to a prior approval procedure, albeit this will be extended to consider the impact of noise on new residents.
Current non-geographic exceptions will remain in perpetuity, but geographic exceptions (including Central London and Manchester city centre) will expire in May 2019, although one can expect many of the local authorities affected to promote Article 4 directions to retail the restrictions beyond this.
Interestingly, there is no mention at present about the idea mooted last autumn of extending permitted development to include demolition and redevelopment of office buildings for housing. This was quite a radical proposal, raising many questions about how it might be implemented – the government may feel that it needs more time to consider this.
Light industrial to residential
A new three-year temporary permitted development right for changes of use from light industrial to residential will come into force on 1 October 2017. Beyond its temporary nature, there are a number of other restrictions imposed, including:
- A floorspace limit of buildings less than 500sqm;
- Evidence will be required that the building was used solely for light industrial purposes on 19 March 2014 (or, if the light industrial use was established but the building was vacant in March 2014, the date the building was last in that use would be relevant), and
- Whether the site is identified as being particularly sensitive (for example, listed buildings, scheduled monuments or in a site of special scientific interest).
- Prior approval will be required relative to flood risk, contamination and transportation considerations. In addition, the prior approval process will include consideration of the impact of the change of use on surrounding light industrial operations, where these are deemed to be “important”. Prior approval must be granted before 1 October 2020, and development must be completed within three years of the prior approval date
Office to residential conversions have proved popular with developers – according to government figures, almost 4,000 conversions were approved between April 2014 and June last year and no doubt the extension of this right in perpetuity will also be welcomed. However, the change of use from light industrial floorspace may not prove as popular, given the restrictions improved (not least on floorspace), and the level of additional work that might be required to render sites fit for habitation. Further, it will also be interesting to see how local authorities will define areas that are considered “important” for light industrial use – from past experience, some local authorities may take a very broad view.
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The market in 2015 for office and warehouse/industrial property was a strong one and we see things continuing in a similar manner in 2016, subject of course, to the possibility of any major global changes dampening the UK economy.
Barring such change, we believe the parallel trends in each sector will continue:
- Sustained rental growth coming through from new lettings and driving the case for uplifts at rent review.
- Lengthening lease terms with landlords resisting three/five year lease breaks that would have been commonly available two years ago.
- Tenant rent free incentives shortening to commonly one month or less per year of lease term – certain, from what might have been two months as recently as 2014.
In the face of limited options, occupiers will show willingness to be more flexible in their requirements and, in particular, to consider new locations that would previously have been regarded as too off-pitch.
Specifically in the office sector:
- Developers’ commitment to new schemes two plus years back will bolster a supply side that was lacking new stock, but competition for the best buildings will be strong and lettings significantly in advance of practical completion will be more common.
- Secondary office buildings will continue to be eroded from the available pool by conversion to residential thereby reducing options and pushing up rents on the remaining stock.
In the warehouse/industrial sector:
- Retailers and e-tailers will continue to be active drivers of the distribution market throughout the UK, particularly as a consequence of sustained internet sales growth.
- Home delivery and click and collect will press the need for facilities closer to market in larger metropolitan areas with the scarcity of stock bringing secondary/older buildings back into frontline use, particularly if they have good yardage.
- In larger urban conurbations, the demand for and political focus on providing more housing will bring further erosion of previously “protected” employment land.
- In extra-urban locations throughout the UK, there has been significant speculative warehouse development but not on the large scale of the previous cycle. We regard the market to have greater balance going forward in that developers holding enabled land are more commonly agreeing design and build deals with occupiers who are keen to secure buildings more closely suited to their operational requirements.
In summary, more of the same in 2016 as we had in 2015.
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