Emily joined Rapleys in July 2021. Emily is currently working as a Planner in the London office, with 18 months previous work experience in Town Planning.
Emily’s areas of expertise include submitting planning applications on behalf of team members and clients, preparing submission documents, and monitoring live applications, focusing mainly on the residential sector. Emily has worked on previous instructions for clients such as Marstons, Study Inn, and has recently worked on an appeal decision with the application gaining permission.
Emily can offer the client reassurance throughout the process of an instruction with regular correspondence and a friendly approach to assistance.
Ryan joined Rapleys as a Senior Planner in June 2021, and has been working as a Town Planner since 2014. Ryan has experience in working on a variety of projects across a wide range of sectors on behalf of both private and public clients, including residential, retail, hospitality, commercial, industrial and mixed use schemes.
Ryan has extensive experience in the co-ordination of planning applications and the project management of multi-disciplinary teams, and advises clients at all stages in the planning process, including the completion of site appraisals, formulation of planning strategies, representations to local plan consultations, preparation and submission of a wide range of planning application and consent types, and securing reserved matters approval.
Being commercially aware, with a strong understanding of development activity and the evolving planning legislation and policy context allows Ryan to provide sound and reliable tailored advice by working directly with the client from the initial site appraisals through to achieving planning permission.
Mike joined Rapleys in January 2021 as a Surveyor in the Retail & Leisure Group. Prior to joining Rapleys, he worked at a boutique cross-sector agency in London, acting for a range of landlords, occupiers and developers to acquire and dispose of sites across all sectors.
In his role at Rapleys, Michael advises clients on both the disposal and acquisition of retail and leisure property. He currently acts for Majestic Wine, PureGym, Primark, Waitrose and Lidl.
Will joined Rapleys in November 2020 and holds the position of Senior Surveyor in the Retail & Leisure Group. Prior to joining Rapleys, he predominately worked in the retail agency sector and more specifically out of town retail during his time at Curson Sowerby Partners, where he advised client’s on retail park disposals. Other duties in his previous role included acquisition work for a number of national retailers.
In his role at Rapleys, Will advises clients on both the disposal and acquisition of retail and leisure property. He currently acts for Lidl, Majestic Wine, Marston’s, The Arch Company, Godwin Developments and Co-op Group.
The drive-thru model is not a new concept to the UK market but, unlike the USA market, it has historically been dominated by a few operators. The early retailers were KFC, McDonald’s and Burger King who all opened their first UK drive-thru restaurants in the mid-1980s and developed their network exponentially throughout the 90s and 00s.
It wasn’t until 2008 that Starbucks opened their first drive-thru store and their success was recognised by the brand leader in the UK market, Costa Coffee, who went on to open their first ever drive-thru in 2011.
In more recent years the likes of Taco Bell and Tim Hortons have entered the UK market with high street and drive-thru locations adopting the same successful model as in their home market. A further entrant in recent years is Greggs, who have tentatively tested their model with franchisee forecourt retailing partners, and are now in process of rolling out corporate drive thru locations – certainly one to watch in 2021!
Popeye’s, the American fried chicken chain, have announced their ambition to enter the UK market with drive-thru’s high on the agenda. Similarly another American chain, Wendy’s, have also announced their re-entry into the UK market and along with a high street presence they will be targeting drive-thru locations.
The competition is certainly heating up for prime roadside locations that benefit from strong traffic counts and are surrounded by a mix of employment and out of town food retail. The rental levels of these prime sites are steadily increasing above the historical cap of £35 psf, driven primarily by competition for sites and further underpinned by operator confidence.
Drive-thru sites have two well documented points of sale: walk in and drive-thru, but also two new markets driven by the digital revolution in click & collect and delivery which essentially increases store productivity and thus profitability. Unlike the High Street stores, a well-positioned drive-thru excels in the delivery market as the site is easily accessible for delivery and collection and are often located closer to the customer.
A trend we expect to see continue is the re-purposing of car parks for drive-thru units on out-of-town retail parks, along with new developments that are effectively destinations consisting of two or three drive-thru units. Added to this we anticipate drive operators introducing smaller drive-thru formats with limited seating to tap into underserved markets or to secure sites where land is at premium.
Finally, there is already market anticipation of the likes of Dunkin Donut’s, German Doner Kebab and Subway (who already have four drive-thru’s in the UK) exploring the drive thru concept in 2021/2022, along with a select few smaller independents who are well funded and have established strong product offering.
Rapleys are active agents in the UK drive-thru market having transacted on a number of new lettings in the last 18 months, and are currently involved with the promotion of a number of new roadside developments across the UK.
Alfred is also delivering the keynote address on the drive-thru market in association with the Leisure Property Forum tomorrow (19/05/2021) morning. Tickets are still available and can be booked here: https://leisurepropertyforum.co.uk/event/webinar-the-uk-drive-thru-market-in-association-with-ar/
- A1 / E retail use
- 3,000 to 4,000 sq ft
- Ground floor retail
- Dedicated car parking
- Prominent sites
- Located on main arterial routes
Contact: Richard Curry | 07876 747146
George started his professional career at Rapleys in September 2020 as a graduate within the Town Planning team at the Manchester office. Prior to formally joining Rapleys, George completed two months of work experience with Rapleys in the summer of 2018 and 2019, along with a brief spell of work experience at Turley’s Leeds office.
As a Planner, he will primarily assists in the preparation of planning documents for residential and retail developments.
George graduated with a Masters of Planning (MPlan) Class Two Division One Honours from the University of Sheffield in July 2020. He is currently working towards gaining his RTPI full accreditation.
- 6,000 sq ft min size with at least 3,000 sq ft on the GF
- City centre core + five minutes walking radius
- Prominent standalone or corner buildings
- Ground floor with ancillary first & second floors considered
- On-site parking beneficial but not essential
- Self-contained office buildings also considered
Contact: Jonathan Jones | 07917 032674
Edward joined Rapleys in February 2020. He is a Senior Planner with experience in project managing developments; in particular retail, hotel and mixed-use schemes. Edward principally provides planning consultancy advice for the retail and commercial sector and works across multi-disciplinary teams of consultants through the preparation, submission and negotiation of planning applications.
Edward’s role also involves undertaking planning appraisals, providing sequential (retail and leisure) and retail impact analysis, and providing strategic advice in bringing forward new development opportunities. Edward is currently working to deliver Lidl’s expansion programme across the UK, by providing effective strategic advice during site acquisition and development planning stages.
- Prominent standalone drive-thru and drive-to units on strong retail and leisure parks
- Greenfield or Brownfield sites
- Minimum size 2,500 sq ft or minimum of 0.3 acre sites
Contact: Russell Smith | 07990 550460
Nikal has secured a 15-year lease with The Co-operative Group for a 4,000 sq ft convenience store at its Exchange Square development in Birmingham
Alfred Bartlett, Head of Retail & Leisure at Rapleys acted for Nikal in securing The Co-operative Group in their mixed use development scheme.
“We felt it was the right first step in satisfying local demand and fits perfectly with the next phase of lettings, currently in solicitors’ hands, that will contribute to the creation of a fresh and vibrant new lifestyle destination.”
Carole joined Rapleys in January 2020 as the Head of Facilities Management, across multi-regional sites, within the wider Property & Asset Management team. Carole brings with her a wealth of experience managing diverse property portfolio’s within the commercial, retail, industrial and residential sectors.
Other experience includes preparation, monitoring and reconciliation of Service Charge budgets, plus the management and monitoring of health and safety compliance.
Notable projects include the transfer of a £250,000 service charge property from Midlands to the North West region. This was instructed based on personal management of the site and direct involvement with the client.
Furthermore, Carole took over a mixed portfolio of non-compliant properties and raised Statutory Compliance from 65% to 85% over a 3 month period. Carole has a further proven track record of adding value to property portfolio’s for clients. A key example being when she achieved a savings of c£500,000 across an entire portfolio by consolidating a number of key facilities management contractor costs.
Carole has managed Beetham Tower in Manchester, a highly prestigious mixed-use property with a hotel and residential apartments (including some confidential and high-net residents). She also managed the prestigious Cube in Birmingham, which is a mixture of residential and commercial.
- Bristol, Manchester & Leeds priority
- 500-600 sq ft in shopping centres
- 2,000 sq ft on retail parks/shopping car park pods
- High footfall locations
Contact: Alfred Bartlett | 07738 090760
- For car manufacturers
- Shopping centre/high street stores
- 200-400 sq m (2,150-4,500 sq ft)
- Close proximity to on/off street parking essential
Contact: Daniel Cook | 07795 660259
Space has opened up in out-of-town retail parks – and shoppers feel more comfortable there. So food retailers are moving in. But will the trend last?
In recent years, out-of-town retail has been in a sorry state, but then came the pandemic and a new lease of life for retail parks.
The perfect size for a supermarket has changed, Richard Curry, Partner and lead food store advisor at Rapleys discusses the optimal store size and how discounter stores are taking advantage of available space.
Jennifer joined Rapleys in September 2019 as an Assistant Property Manager based in the Birmingham office. Jennifer has a strong background in residential property management with over 8 years experience in this sector.
Jennifer has a practical and pragmatic approach to property management but also has the ability to think outside of the box when it comes to problem solving. At Rapleys, Jennifer hit the ground running to assist a client with over 40 dental practices across the UK. In her first two months Jennifer streamlined the processes for this client. She maintains a daily involvement overseeing the works at the properties and keeps the client informed. The level of outstanding repair works for this client has since more than halved and the client’s feedback has been incredibly positive.
Jennifer offers a high level of care and efficiency in her work making clients and tenants alike feel valued and having trust in the service provided by Rapleys.
The pandemic has accelerated the high street’s decline. Is government support the answer, or does the concept need a wholesale rethink?
Following the dramatic decline of the high street, Alfred Bartlett, Head of Retail & Leisure at Rapleys share his views on how we can stimulate the recovery of our high streets.
“I believe incentives should be given to developers to invest in the regeneration, or rather resurgence, of town centres.” He argues those incentives could also extend to startup retailers “in certain key sectors” to give them the confidence to set up stall in town centres.
The UK’s grocery real estate sector has boomed during the coronavirus pandemic, but will investors still be piling into the sector once Covid restrictions are lifted?
Last year, real estate transactions in the UK grocery sector rose to £1.83bn, from £1.78bn in 2019. Richard Curry, Lead food store adviser at Rapleys shares his view on investors’ habits.
Marcus joined Rapleys in August 2019 as a surveyor in the Corporate & Investor Management department.
Prior to Rapleys, Marcus worked for NHS Property Services in the Asset Management department, managing a portfolio of health centres and surgeries in northwest London. Alongside handling day to day management issues, Marcus also was involved in development projects and leasing initiatives geared to optimising the substantial NHS Property portfolio. Marcus’ career started at Savills, where he worked in the Capital Allowances team providing tax advice on a range of property asset classes to high net worth individuals and institutional investors such as Legal & General.
As a result of dealing with a variety of property across the UK, Marcus has established good contacts with occupiers and landlords and his highly forensic approach will help clients unlock maximum benefit from their portfolio.
Richard Curry, Partner and lead food store adviser at Rapleys shares his top five projections for the retail industry in 2021. From consumers adapting the way they shop to a surge in the convenience store sector, there is no doubt that Covid-19 has had an impact – but for how long?
One stop shop
Retail closures, social distancing and limitations on people’s time spent out of the house has meant the big weekly shop has made a resurgence. This had been dropping off with people more likely to be doing fewer but more shopping trips, including in transit to and from work as well as looking for more experiential options such as at farmers markets. Especially during Covid-19, the one stop shop is a necessity to minimise exposure. The big supermarkets, with wide aisles and lots of car parking facilities have clearly benefited although this is unlikely to remain. While high street retail has continued to struggle, lockdown has improved awareness of local offerings and many of those have been quick to incorporate home delivery into their services. The big supermarkets remain cautious and are not committing to capital expenditure to build and fit out new stores. This has given the ‘Big Four supermarket the opportunity to consolidate their estates and right-size their existing estate fit for the future.
Bringing retail home
While the one stop shop is back, consumers are ever more mindful of product sourcing, supply chain, price and environmental issues such as carbon footprint. This has helped stimulate more interest in the offerings of local retailers and we have seen consumers choose to buy where they can from farm shops, bakers etc. At the other end of the spectrum, though, the lockdown restrictions have clearly given rise to a surge in-home delivery which local retailers have tried to jump in on but which the large operators with their scale and sophisticated supply chains are in prime position to continue to benefit from and compete more effectively on price for consumers who are worried about their own financial security and the wider economic landscape. This trend is here to stay. Supermarkets area venturing out to partner with delivery services – Deliveroo/Ocado, Amazon has opened new ‘dark stores’ for online only retail including its Wholefoods offering, while innovative operators like Oddbox are tapping into the interest in local and direct from farm produce.
Another trend which Covid-19 has hastened is the rise in transient shopping which can offer consumers easy access to retail from their car. This has benefited other roadside retailers including convenience stores located on fuel station forecourts. Asda’s acquisition by EuroGarages Consortium arguably shows how powerful the forecourt offering is and can be for the major supermarkets.
Discounters will continue their march
The Big Four supermarkets have been losing ground to the discounters in recent years but Covid-19 has seen a temporary reversal. Discount stores may not have benefited as much as the big supermarkets during the pandemic, as the business model relies on high volume of people doing multiple shops. That said the discount stores will keep wrestling with the large supermarkets for trade and will continue to expand.
Discounters are also considering smaller formats in urban locations and previously perceived low population towns which draw from a wider catchment in certain rural locations. Closer analysis of catchment areas will provide an accurate assessment of these locations.
Bestway’s acquisition of Costcutter has shown there will be continued opportunities in the convenience sector and there is room for other convenience offers to expand and have a presence on the local high street, which is otherwise dominated by a small number of big players. The acquisition is likely to mean a far more coordinated roll out of Costcutter stores, potentially competing with the likes of Sainsbury’s Local, Tesco Express and The Co-Ops. The existing forces in this field are facing a diminishing amount of locations that are not already covered and their interest will be in aligning with new housing developments to continue growth given they have likely reached capacity in existing conurbations.
Rapleys Retail & Leisure team provide expert advice on the ever-evolving retail sector. Our comprehensive understanding enables us to meet clients’ needs, whether this is requiring a new leasehold or assisting in the disposal of assets.
For commercial-minded advice to support your endeavours, get in touch with Richard Curry, Retail & Leisure Partner at Rapleys.
Read some of Richard’s latest commentary in The Grocer:
- North Birmingham
- Land/Industrial with yard
- Circa 1 acre
- No more than a 10 minute drive from a motorway junction
Contact: Matthew Guest | 07810 698175
This time last year, few could have predicted a virus would wreak such havoc worldwide. In its wake, the grocery sector has endured challenges that would have seemed preposterous just 12 months ago. As a global vaccination effort gets underway it’s hard to say if we will see a return to normal, or will shoppers persist with the new habits they formed under lockdown?
Richard Curry, leading food store advisor at Rapleys shares his prediction on transient shopping and how this trend has benefited large supermarkets and roadside retailers.
- 5,000 – 10,000 sq ft
- Short term furniture clearance
- 3-6 month basis
- National brand
Contact: Russell Smith | 07990 550460
Adam has 25 years experience representing landlord institutional clients, property companies and high net worth individuals by delivering both property management and asset management strategies on assets across all real estate markets. This includes office, retail, industrial, leisure and residential. Prior to joining Rapleys, Adam gained extensive experience with Fletcher King, NB Real Estate and M J Mapp.
During the last 10 years, Adam focused on building strong and motivated property and asset management teams whilst delivering exceptional service levels. More recently, Adam’s sole focus has been to deliver asset management initiatives, working closely with Shaftesbury PLC, Barings Real Estate Advisers, CBRE Global Investors, TH Real Estate, CW+ and high net worth individuals, successfully identifying and executing numerous “added value” opportunities.
Adam thrives on formulating and implementing asset management strategies, which maximise clients’ income and minimise clients’ liabilities, in turn enhancing asset performance.
Adam heads up the Property & Asset Management team, predominantly based in Rapleys London office, and is focused on identifying and executing “added value” opportunities for existing clients, whilst providing senior resource to generate and support growth of our client base.
- 2,500 – 4,000 sq ft
- High street/arterial road in target locations
- A3 (change of use will be sought for A1 properties)
Contact: Alfred Bartlett | 07738 090760
- Within 25 miles of Manchester
- 14,000-21,000 sq ft
- Indoor soft play centre
- Prominent roadside or retail parks
- Leasehold or freehold
Contact: Thomas Ball | 07831 842859
The wave of retailers entering CVAs this year is playing into the hands of variety discounters such as B&M in property talks, according to experts.
Richard Curry, Partner in Retail & Leisure explains how variety discounters were able to dictate renewed leases “almost like a new lease scenario”, gaining “six months rent-free, a break at year-three, whatever terms you choose”.
Landlords are “so scared they’re going to clear off,” he said.
The BPF forecasts ongoing disruption from the pandemic “will undoubtedly mean many more [businesses] consider CVAs in the months to come”.
Curry said it also meant “more to come” for variety discounters’ property bargaining power.
Following changes to permitted development (PD) rights and the White Paper Planning Reforms published at the end of the summer, the Government has recently launched a further consultation on new Permitted Development rights, allowing a change of use from the new Commercial, Business and Service use class E to residential use class C3. It’s fair to say that most in the industry were expecting this, but perhaps not quite so soon, and it’s clear that the proposed new rights will have far reaching consequences for our high streets, town centres and beyond.
The consultation, published on 3 December, proposes new PD rights to allow the change of use from Class E (which includes retail, office, light industrial, gyms, medical facilities and nurseries) to residential dwellings without the need to obtain planning permission.
The PD right will apply to all Class E buildings, including those within Conservation Areas. Areas of Outstanding Natural Beauty, National Parks, World Heritage Sites and Listed Buildings will be excluded from operation of the new right.
A prior approval application will be required, which should address a short list of criteria as follows:
•Daylight / sunlight;
•Fire safety; and
•Residential amenity (in certain locations).
The prior approval application must include detailed floor plans and minimum space standards will be mandatory. To benefit from the new right, the building must have been in a use falling within use Class E on 1 September 2020. It appears that there will be no affordable housing or other planning obligation requirements, and no CIL liability where no new net floorspace is created.
The proposal forms part of the Government’s response to changing behaviours affecting the high street brought about by the rise of on-line retailing and the impact of COVID-19.
The rapidly changing face of our town centres demands radical action to re-imagine and re-vitalise what were once vibrant, busy commercial centres. The Government’s intention is clearly to allow change to occur swiftly with limited intervention in the process of change by Council planners.
For further advice on the reforms and to discuss the opportunities that the proposed PD rights introduce, please contact Neil Jones, Partner in the Town Planning team at Rapleys on 07774 652 426.
Jonathan joined Rapleys in June 2018 as a surveyor in the Retail & Leisure team based in the Birmingham office.
Prior to joining Rapleys, Jonathan was employed in a client side role acquiring multi-site retail locations which also included the co-ordination of the store design and build process. Other duties consisted of ongoing estate management duties and day to day franchisee liaisons.
Rapleys Asset Management team specialises in maximising income and value of property assets and minimising clients’ liabilities. In collaboration with our other specialised teams, our senior team of Partners have experience working with investors, occupiers, developers and landlords, in both the public and private sectors.
We concentrate on added value initiatives such as:
• Formulating asset and portfolio strategies
• Repositioning assets
• Change of use/reconfiguration
• Strategic refurbishments
• Re-gearing leases to improve terms and covenant
• Transaction management
Our sectors are:
• Industrial & Distribution
• Retail & Leisure
• Automotive & Roadside
• Charities/non profit
• Affordable Housing
What we do
We provide a one stop solution for the asset life cycle, from initial investment advice on acquisition, planning advice, redevelopment, project management, building consultancy, lease consultancy, management and disposal. Our service is flexible. It can be:
• End-to-end of the ownership cycle, by working alongside our Investment team to identify added value opportunities (pre-acquisition) and delivering these initiatives on acquisition, through to final exit or;
• Ad hoc advice to improve current asset performance during the hold period, by exploring change of use, re-development initiatives and lease re-gears.
Our strong nationwide team of 150 readily collaborate to drive “added value” initiatives for our clients, providing cross specialism advice. Our in-house sector specialists can immediately support initiatives with their excellent market knowledge and expertise, without relying on external advisers. The scale of Rapleys enables us to resource instructions, providing an efficient collaborative Partner-led approach.
“The UK is in uncertain economic conditions, which will challenge your asset performance. Rapleys approach, combined with our breadth of experience and skill set will position assets to maximise performance and minimise liabilities – our independence enables clients to maintain discreet profiles, with a focused adviser who truly values long term relationships.”
Adam De Acetis, Head of Asset Management
“Rapleys asset manage Trident Industrial Estate on behalf of the Royal London Property Fund (The Fund). The mandate is led by Adam De Acetis, with support from a multi-disciplinary team. Over the period since acquisition, The Fund has benefited from both new leasing and lease restructuring transactions which have significantly added value. Rapleys has clearly demonstrated an ability to reposition an asset and drive investment performance.”
Andrew Johnston, Fund Manager, RLAM
As mentioned in a recent update the Government has introduced Regulations to amend the Use Classes Order and scope of Permitted Development. These provide opportunities to repurpose existing residential, commercial and retail assets without the need to obtain planning permission, providing greater flexibility in the face of uncertain and fluctuating market conditions.
Since the update was issued a claim for a Judicial Review has been submitted to the High Court on behalf of the campaign group Rights : Community : Action. The claim argues that the Regulations are unlawful and requests that they are quashed. A hearing is scheduled to take place on 14 and 15 October 2020.
The timing of the hearing is problematic as the Regulations came into force on 1 September 2020 and can be legitimately be utilised for their intended purposes (e.g. changing the use of a building, erecting an upward extension etc). However, should the claim be successful, and the Regulations quashed, it is possible that any changes of use or works undertaken since 1 September 2020 could be deemed unauthorised and require retrospective planning permission (which may or may not be granted). Therefore, until the claim is resolved, it is crucial that this risk is factored in when making decisions on whether to proceed with any changes of use or works which rely on the provisions of the new Regulations.
- Road side Drive-thru and Drive-to
- Retail/Business park Drive-thru or Drive-to pod units
- In line units 1,500—2,000 sq ft
- Leasehold or freehold
- High footfall/heavy traffic flow locations
Contact: Will Primrose | 07879 417824
- Various city locations
- 10,000 – 12,000 sq ft
- Consider split floors
- A1 retail use
- Freehold or leasehold
- In an area of activity/leisure
Contact: Richard Curry | 07876 747146
Natasha joined Rapleys in November 2017 and is the lead contact for neighbourly matters services in London. She specialises in Daylight and Sunlight, and legal Rights of Light.
Natasha previously worked as a Rights of Light Surveyor and Expert Witness, and has a particular interest in these services.
Her main focus is maximising the development potential of sites whilst providing efficient and client based service. Natasha has a strong background in compulsory purchase and s.203 Housing and Planning Act 2016 with council related schemes. She also has experience in managing large scale developments and schemes with a large number of potentially affected neighbours.
Natasha also has a further strong focus on protecting rights of neighbours affected by proposed developments.
- 5,000 to 8,000 sq ft
- High end sofa retailer requirement
- Near tube/train (within 7 minutes walk)
- Up to £150k pa
- Ideally with associated parking or close to car park
Contact: Richard Curry | 07876 747146
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.
As trailed a few weeks ago, the Government laid further changes to the planning system before parliament on Tuesday, bringing significant changes to the current Use Classes Order, coming into effect on 1 September 2020, and the Permitted Development regime, coming into effect on 31 August 2020, representing a major overhaul of key parts of the town planning regime.
• A new ‘Commercial, Business and Service’ Use Class: (Class E) will subsume and replace Use Classes A1 (Shops) (albeit with a notable exception – see below), A2 (Financial and Professional Services), A3 (Restaurants and Cafes) and B1 (Offices, Research & Development and Light Industrial), as well as certain D1 (Non-Residential Institutions) and D2 (Assembly and Leisure) uses such as health/medical centres, gyms and nurseries which will not fall within the new Class F. Under normal circumstances, this will permit premises to switch between these uses without the need for prior approval or planning permission. However, shops smaller than 280sqm mostly selling essential goods, including food, and at least “1km from another similar shop” will fall within a new Class F.2 (see below);
• Class D to be replaced by a new Class F: the current Use Classes D1 (Non-Residential Institutions) and D2 (Assembly and Leisure) will be revoked, and replaced with the following:
*Class F1 (Learning and Non-Residential Institutions) which will include educational premises, museums, galleries, libraries, public/exhibition halls, places of worship and law courts.
*Class F2 (Local Community) which will include some small shops (as detailed above), community halls and meeting places, outdoor sports and recreational facilities, swimming pools and skating rinks.
• Other Use Class Order changes: consequentially, a number of different land uses which currently fall into Use Classes will become sui generis, and therefore planning permission will be required to change to and from them, including: pubs and bars, hot food takeaways, music venues, bingo halls and dance halls.
• Permitted Development for the Demolition of Vacant Buildings to Residential Development: specifically, the demolition of a single detached purpose block of flats, or building used for office, research and development or industrial purposes, and its replacement by a single detached block of flats or detached dwelling within the footprint of the old building. The building to be demolished must have been vacant for a period of at least 6 months, have a footprint no larger than 1,000 sqm and be no taller than 18 metres. There is, also, a more wide-ranging prior approval process which will require confirmation from the Local Planning Authority that the new development is acceptable, before the work can commence. In this regard, the Local Planning Authority will consider, amongst other things: the design and appearance of the new building, possible transport and highway impacts, residential amenity impacts including the right to light, and the impact on heritage and archaeology.
• Two-storey Upward Extensions: the upward extension of existing dwellings and blocks of flats by up to two storeys. The rights will only apply to dwellings constructed between 1 July 1948 and 28 October 2018, and to buildings for flats, between 1 July 1948 and 5 March 2018. The new rights are also subject to a number of other limitations and conditions, including the requirement for prior approval from the Local Planning Authority in relation to matters such as the design and appearance of the new extension, possible transport and highway impacts, and residential amenity impacts including the Rights to Light.
Guidance providing further details about how the changes will work in practice is still to be published, but they are likely to have wide-ranging consequences. From a landowner and developer perspective, they are very likely to present a range of opportunities to repurpose existing residential, commercial and retail assets in order to respond and adapt to fluctuating market conditions. If you have any questions following these announcements, particularly in relation to the exceptions, limitations and conditions to such measures, please contact Jeevan Thandi or any member of our nationwide Town Planning team.
Tom began working for Rapleys in September 2013 after completing his A levels. As a senior client accountant within the corporate & investor management department, the majority of his time is dedicated to the New Look Retailers portfolio which includes daily tasks such as processing head lease payments, ad hoc payments, raising tenant charges and managing VAT invoices. He also assists on the Ann Summers portfolio with tasks such as producing monthly client statements.
He has recently started studying for his AAT qualification with an online college. He is hoping to complete his studies as soon as possible to help with his development and offer the best possible service for the clients he looks after.
Marcin is an Associate in Rapleys’ Planning team with over three years experience in both the public and private sector. Since joining Rapleys in December 2015, Marcin has been involved in a wide variety of planning projects within retail, commercial and mixed used developments and has developed strong planning and project management skills.
He is responsible for the preparation of planning applications and appeals, monitoring planning policy documents, organising public consultation events, and undertaking feasibility and planning appraisals (particularly in the convenience retail sector).
Marcin manages planning projects from conception through to completion, and has also represented clients at planning committees.
- A3/A5 planning use
- Out of town—drive-thru/pod sites
- In town—primary or strong secondary retail locations
- High footfall within existing clusters of restaurants
Contact: Russell Smith | 07990 550460
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 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.
Wakako has also represented clients at Local Plan examination hearings.
Wakako joined Rapleys in 2006 as a graduate planner, and was promoted to senior associate in 2015.
- A3/A5 uses
- Priority towns: Birmingham, Huddersfield, Leeds, Leicester, Manchester, Wakefield
- 92.9 – 464.5 sq m (1,500 -5,000 sq ft)
- In town and out of town locations
- Freehold or Leasehold
Contact: Alfred Bartlett | 0121 454 6439
Gateway 14 Ltd, advised by its development manager Jaynic, has appointed property consultants Avison Young and Rapleys to market the 156-acre mixed-use and logistics scheme at Junction 50 of the A14 at Stowmarket, Suffolk. Jaynic was appointed as development manager earlier this month.
Strategic real estate advisor Avison Young has been appointed to market the overall scheme both in the UK and internationally and Rapleys has been appointed to investigate the roadside potential of the site given its immediate proximity to the A14. A further marketing agency appointment will be made in the near future with local and regional expertise to identify occupier demand in East Anglia.
Sir Christopher Haworth, chairman of Gateway 14, said: “We are moving ahead rapidly with Gateway 14 and realising our vision of delivering a multi-million pound boost for the wider economic area of Mid Suffolk. We are delighted to have Avison Young and Rapleys on board alongside Jaynic to deliver this very exciting scheme.”
Ben Oughton, development director of Jaynic, said: “This is a key site for Stowmarket, and East Anglia as a whole and with the help of Jaynic and the agents we are seeking to attract a mix of occupiers providing a range of employment opportunities that could create thousands of jobs for the town.”
John Allan, Director, National Industrial & Distribution at Avison Young, said: “We are delighted to have been appointed as lead marketing agent on this strategically important scheme for Suffolk.”
Alfred Bartlett, Head of Retail & Leisure Group at Rapleys LLP, said: “We are delighted to have been instructed to advise on this strategically located and highly prominent opportunity, and look forward to working with Jaynic to bring the development forward. Our appointment at such an early stage in the master planning of the scheme allows us to influence the layout, mix make up of occupier to reflect the market and more importantly adapt to specific operators’ requirements. We would encourage interested parties to make contact to discuss how they might be accommodated at Gateway 14.”
Gateway 14 Ltd, is a wholly owned subsidiary of Mid Suffolk District Council and has just appointed Jaynic as the development manager for the scheme. This will provide up to 2.3 million sq ft of business, logistics and commercial accommodation over the next 10-15 years, with the first buildings being available in 2021/2. A planning application will be submitted by the end of 2020, to enable a phased development on the 156-acre site.
The masterplan layout is still being developed, however the site could accommodate logistics buildings up to 1,000,000 sq ft, with roadside uses alongside the A14 frontage, and headquarters office/R&D campus style buildings.
The site can support the growth of creative and technology businesses, a sector which is already important to Mid Suffolk, while also maximising opportunities for inward investment and job creation.
The A14 corridor is one of the principal trunk routes for UK logistics offering access from the Port of Felixstowe into the heart of the UK and it is also a primary route for export to European and world markets. The site is 26 miles from the Port of Felixstowe, 12.5 miles to Ipswich and the A12, and 45 miles to M11 and links to Cambridge.
Steven heads up 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 30 years surveying experience.
Will Primrose, Senior Surveyor in the Retail & Leisure Group at Rapleys, looks at the rights and obligations.
Recent weeks have seen massive uncertainty across near enough all business sectors as a result of the Coronavirus, and the Government recently announced a further three-week extension to the lockdown. The majority of retail and leisure occupiers are suffering from a complete suspension of trade and many landlords have announced breaks, rent reductions or rent holidays to aid them during this period. Many operators will have questions regarding their rights and obligations during this unprecedented crisis. Will Primrose, Senior Surveyor in the Retail & Leisure Group at Rapleys addresses some of these key questions.
Can a tenant adversely affected by Coronavirus terminate their lease?
Essentially the answer is no – the only exception in this case would likely be if their lease contained a rolling break clause. Commercial leases generally don’t contain force majeure clauses. The only common factor that would change this is if the tenant went into liquidation.
Can a tenant withdraw from an exchanged Agreement for Lease?
This will depend on the provisions and clauses within the Agreement for Lease (AFL). We will likely see Coronavirus Clauses becoming more common within legal documents. Standard force majeure clauses usually refer to events such as terrorist attacks, wars, acts of God and do not apply here. However, we are seeing Pandemic Clauses become more prevalent. A possible reason for a tenant to withdraw would be on a conditional AFL, with the landlord unable to satisfy certain conditions – for instance delivering a scheme before a long stop date due to issues resulting from Covid-19.
Can a tenant withhold rent or pay a reduced amount due to the financial implications of COVID-19?
The simple answer is no, the tenant is not automatically entitled to such benefits. Rent suspension provisions (common in most leases) don’t apply here as they relate to damage to the premises by insured / uninsured risks. However, Landlords are encouraged to be sympathetic during this time. Covid-19 may lead to CVA’s for tenants, which involves negotiation with all of their creditors, including landlords. A rent holiday can mean a number of outcomes and the tenant is unlikely to be fully released from their payment obligation. It is more likely that a negotiation will result in a deferral / repayment programme. It is advised that these are documented by a solicitor.
Can a landlord evict a tenant for non-payment of rent?
We are now seeing these unfortunate issues coming to the press following the March quarter day. The Coronavirus Act 2020 introduced last month banned forfeiture until 30 June 2020 – or longer if the government deems necessary – for non-payment of rent. However, at the time of reporting they do not prevent landlords from taking steps to force tenants to pay rent withheld because of the lockdown and a number have decided to pursue statutory demand notices and Commercial Rent Arrears Recovery (CRAR). This can be catastrophic for a tenant with little or no income. Whilst many tenants are having open and constructive discussions with their landlords during this difficult, period, others are in danger of receiving statutory demand notices or winding up orders.
Does a tenant have to continue paying Business Rates?
Under a lease the tenant is usually responsible for Business Rates. There have been government initiatives and concessions to assist them, particularly in Retail & Leisure. During a lease, Business Rates are an arrangement between the tenant and Local Authority, not the landlord.
Whose responsibility is it to manage the virus within a let premise?
The tenant, as they will have a covenant within their lease to comply with all acts of parliament, by-laws and regulations; including health and safety of all customers employees and visitors. However, it should be noted of the difference between leases of whole and leases of part. It can get more complicated when common parts are a factor – e.g. within multi-let office buildings and shopping centres.
How are tenants with a Keep Open covenant being affected?
Whilst many leases in the retail sector contain these Keep Open clauses (e.g. shopping centres or with anchor tenants), in ‘normal’ circumstances these are not usually enforced. Courts are typically reluctant to implement Keep Open clauses and you would expect implementation to be even less likely in the current climate – especially with the aforementioned Government protection for tenants affected by COVID-19.
What are some of the Landlord’s obligations in this situation?
A key obligation will be to comply with Government guidelines which will likely fall within their service charge and estates obligations – a situation that has escalated quickly in the last few weeks. In conjunction with Government guidelines, what started as an obligation to provide enhanced hygiene / sanitising products has become full premises closures. Costs for measures such as deep cleaning, hand sanitisers and other items are usually recoverable for the landlord through the service charge.
Any potential risks to a landlord here?
Potentially. In theory the tenant could make a case that the recent closures mean that the landlord would be liable for damages under a lease under derogation from grant – e.g. breach of quiet enjoyment of the premises or loss of profits. Again, if such claims are brought forward, you would imagine the courts would be reluctant to award damages in this climate with the Government’s lockdown and social distancing guidelines as the backdrop.
As is often the case with landlord and tenant relationships, it is a question of who bears the loss? Whilst a lot of press has been about landlords being sympathetic to tenants, they rely on their rental income for many reasons – to pay borrowings, loans, staff etc. We are now seeing figures published which emphasise the drop in rents that some landlords are receiving and many have as much to be concerned about as tenants. A collaborative approach that focuses more on open discussions and negotiation rather than litigation is going to be key here.
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
- A3/A5 planning
- Central London locations
- 1000 sq ft minimum
- High footfall locations
Contact: Russell Smith | 07990 550460
- Drive-Thru restaurant requirement
- Various locations listed in brochure
- Minimum site of 0.45 acres
- Strong residential catchment areas
Contact: Russell Smith | 07990 550460
- London: Liverpool Street and Covent Garden
- 300 sq ft ground floor and 300 sq ft basement of storage
- To add to the five branches already trading
- Established for over 100 years
Contact: Richard Curry | 07876 747146
Recent weeks have seen massive uncertainty across near enough all business sectors, nowhere more so than in the Retail & Leisure sector. An issue that has been well publicised throughout the press is tenant’s obligations on their lease – with many seeking breaks and rent reductions/holidays as the impact of Covid-19, and particularly the ongoing lockdown, on property assets has become apparent. Some common Questions & Answers below.
Can a tenant adversely affected by Coronavirus terminate their lease?
Essentially the answer is no – the only likely exception in this case would be if their lease contained a rolling break clause. Commercial leases generally don’t contain force majeure clauses.
Can a tenant withdraw from an exchanged Agreement for Lease?
This will depend on the provisions and clauses within the Agreement for Lease (AFL). We will likely see Coronavirus Clauses becoming more common within legal documents. Standard force majeure clauses usually refer to events such as terrorist attacks, wars, acts of God and do not apply here.
A possible reason for a tenant to withdraw would be on a conditional AFL, with the landlord unable to satisfy certain conditions – for instance delay to Practical Completion (PC) due to issues resulting from Covid-19.
Can a tenant withhold rent or pay a reduced amount due to the financial implications of Covid-19?
The simple answer is no, the tenant is not automatically entitled to such benefits. Rent suspension provisions (common in most leases) don’t apply here as they relate to damage to the premises by insured/uninsured risks. However, Landlords are encouraged to be sympathetic during this time.
Covid-19 may lead to CVA’s for tenants, which involves negotiation with all of their creditors, including landlords. A rent holiday can mean a number of outcomes and the tenant is unlikely to be fully released from their payment obligation. It is more likely that a negotiations will result in a deferral/repayment programme. It is advised that these are documented by a solicitor.
Does a tenant have to continue paying Business Rates?
Under a lease the tenant is usually responsible for Business Rates. There have been government initiatives and concessions to assist them, particularly in Retail & Leisure. During a lease, Business Rates are an arrangement between the tenant and Local Authority, not the landlord.
Whose responsibility is it to manage the virus within a let premise?
The tenant as they will have a covenant within their lease to comply with all acts of parliament, by-laws and regulations; including health and safety of all customers employees and visitors. However, it should be noted of the difference between leases of whole and leases of part. It can get more complicated when common parts are a factor – e.g. within multi-let office buildings and shopping centres.
How are tenants with a Keep Open covenant being affected?
Whilst many leases in the retail sector contain these Keep Open clauses (e.g. shopping centres or with anchor tenants), in ‘normal’ circumstances these are not usually enforced. Courts are typically reluctant to implement Keep Open clauses and you would expect implementation to be even less likely in the current climate.
Are there any risks to landlords here?
Potentially. In theory, the tenant could make a case that the recent closures mean that the landlord would be liable for damages under a lease under derogation from grant – e.g. breach of quiet enjoyment of the premises or loss of profits. Again, if such claims are brought forward, you would imagine the courts would be reluctant to award damages in this climate.
As is often the case with landlord and tenant relationships, it is a question of who bears the loss? Whilst a lot of press has been about landlords being sympathetic to tenants, they rely on their rental income for many reasons – to pay borrowings, loans, staff etc. Some landlords can have as much to be concerned about as tenants and a collaborative approach is likely to be key here. It is going to be crucial to look at negotiation rather than litigation between landlords and tenants.
To discuss commercial leases and any other queries arising as a result of the current situation, please contact Will Primrose or James Clark in the Retail & Leisure Team at Rapleys.
- Restaurant requirement
- Destination sites required specified on attached
- 3,000 – 6,500 sq ft upwards
- Split level space considered
- Preference for outside space/parking
Contact: Russell Smith | 07990 550460
Rebecca joined the investment agency team at Rapleys in early 2014 and works with a variety of different clients throughout the UK. Advising on the acquisition and disposal of individual properties and portfolios, Rebecca primarily identifies opportunities, highlights asset management potential and provides valuation and rental advice to clients, principally focusing on the out-of-town retail, automotive and hotel sectors.
Prior to joining Rapleys, Rebecca worked for Edward Symmons where she spent three years in the hospitality and leisure team. She specialised in the hotel sector, valuing a large variety of hotels nationwide, predominantly for secured lending purposes. She qualified as a Chartered Surveyor in Spring 2013 having gained a detailed knowledge and understanding in the sector and wider property industry.
- New showrooms required nationwide
- 3,500 – 9,000 sq ft of new space
- Secondary locations, existing retail outlets, office/warehouse conversions considered
- Ideally character buildings in affluent commercial locations
Contact: Russell Smith | 07790 550460
- Showroom requirement
- Newcastle Upon Tyne (Jesmond/Gosforth)
- 750-1,500 sq ft
- Short term let
- Busy high street location/affluent area
- A1 retail use required
Contact: Russell Smith | 07790 550460
- 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
- A1 Retail units
- West Midlands, East Midlands and Home Counties – please see attached for priority towns
- 1,000 sq ft (92.9 sq m)
- High Street units with rear loading
Contact: Charlie Steele | 0121 454 6439
- Prominent roadside sites
- West Midlands – please see attached for priority towns
- Minimum 0.4 acres
- Busy locations, easily accessible and close to major traffic junctions
- Freehold or leasehold
Contact: Alfred Bartlett | 0121 454 6439
Martin has over 25 years experience in the investment market. He has acted for many of the larger fund management houses, pension funds and property companies, and also advises a number of private trusts and property syndicates in the sale, purchase and funding of commercial investment property.
Martin advises clients on portfolio strategy and asset management initiatives. He acts for a number of key developer clients in the arrangement of development funding via Joint Venture partners, banks and institutional purchasers, varying from mixed-use schemes to food and non-food retail schemes and dealerships. He has also advised retailers on sale and leaseback disposals and purchasing fund clients in the food sector.
Martin joined Rapleys in 1989 and was elected as a partner in 1998.
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.
Yesterday’s Budget announcement contained a clear message of business continuity as the Chancellor relayed emergency measures to mitigate the impact of Coronavirus. Public health, the NHS, SMEs and workers were the primary focus, but for the property industry, there were still some takeaway messages. Not least, an announcement of short term emergency Business Rates relief, as well as a programme of investment launched for roads and infrastructure. Key members of our service teams add their comments.
Retail & Leisure Group
Russell Smith, Partner, comments; ‘overall there was some welcome, positive news for the high street, in particular for small shop and restaurant owners who will see an increased business rates discount. It is a temporary and extreme step sadly in light of the destabilising Coronavirus pandemic, but nonetheless it is well needed and overdue for the ailing retail sector.
The announcement to hold a review into the long term future of business rates should make a marked change to the future of the high street. This will need to be implemented in a timely manner however as there is likely to be a further reduction in footfall in high street across the country in the months to come.’
Alfred Bartlett, Partner, adds ‘ironically, the digital service tax (2% tax introduction on digital businesses) will also help bricks and mortar retail and may prove a good first step in balancing the investment in trading formats and redressing the high street decline.’
Automotive & Roadside
Phil Blackford comments; ‘the Government have announced a fund of £500 million over the next five years to support the rollout of a fast-charging network for electric vehicles ensuring that drivers will never be further than 30 miles from a rapid charging station. That is very welcome news to both manufacturers and EV charge suppliers and hopefully will provide the much needed kick start to creating the necessary infrastructure in the UK to align Government targets, manufacturer’s development and production and a structured network of EV charging stations.’
Jason Lowes, comments; ‘in terms of planning, most of the announcements in the Budget were primarily financial commitments, with the Government’s planning reform initiatives saved for today’s announcement by Robert Jenrick. These indicate that a planning white paper will be released in the spring, addressing a wide range of matters, including:
- Introducing a “zonal” element to the planning system
- Further measures to encourage development on brownfield land
- Initiatives to speed up the planning system
By way of background to the above, the Government feels that the planning system is holding back the delivery of housing, and that these initiatives will break down barriers. However, they are all at a very early stage, and we will be looking very closely on how they develop. Nevertheless, any initiatives that render the planning system more predictable and straightforward to navigate will no doubt be welcomed by the industry. Rapleys Town Planning team will be releasing a fuller newsletter on these reforms shortly.’
Mark joined Rapley’s automotive and roadside team in 2003 and has wide experience within the sector. He has advised on over 1000 petrol stations for clients ranging from major oil companies to sole traders. His dealership experience is just as varied having acquired and disposed of sites throughout the UK.
Following his graduation from Nottingham Trent University, Mark spent 6 months working in the professional department of King Sturge’s Bath office. He also gained experience working for Colyer Commercial, a small regional practice located in Ashford, Kent, and in Barbers’ commercial department in Telford.
Rapleys’ Town Planning and Retail & Leisure Group work closely with Lidl’s national acquisition department and are delighted to share some of our latest acquisitions for the discount grocer as they reach a pivotal milestone in Great Britain and open their 800th store.
Rapleys work in partnership with Lidl on a spectrum of services, from initial planning appraisals, scoping reports, property acquisition and public consultation. See below for highlights of some of the deals or speak to the team for more information.
Featured properties include Altrincham Retail Park, Cambridge Retail Park, Swindon Orbital Retail Park and Manchester Piccadilly Gardens.
Further details are available here or via the download button.
In February the Competition and Markets Authority (CMA) called for Britain’s biggest supermarket chains to review thousands of land agreements and prove they are lawful. This came to light after the CMA openly wrote to Tesco Chief Executive calling the retailer out on unlawfully preventing landlords from letting properties to its rivals at 23 sites across the UK.
We asked Richard Curry, our food retail expert, for his opinion, specifically asking how permeated is this practice in the industry and do you predict more agreements of this nature will be uncovered? He commented:
The CMA’s ruling will come as no surprise to anyone who has observed the food retail market over the years, as restriction covenants have been a known feature of supermarkets’ strategies for decades.
In the period prior to the rise of discounters and ecommerce, when the race for space still dominated the food retail sector, supermarket operators would often purchase an old industrial site, occupy one of the smaller lots, with a view to establishing a larger-format store in one of the other lots once trading had increased. Restrictive covenants were a crucial part of this strategy. In order to prevent loss of trade to competitors in the meantime, they would sell the other lots with a restriction of use clause, ensuring the subsequent owners could not sell on to another food retailer.
Even when the race for space ended, the covenants continued to protect retailers from loss of trade to competitors and were waiting patiently for another bullish market when rollout of larger stores was back on the agenda.
Restrictive covenants do have their uses – if a food retailer takes a gamble by investing in a new location, such as within a new urban extension or trading estate, they should be able to benefit from their initial financial commitment to an unestablished trading location without competitors coming along and building next door as soon as trade increases.
However, most convenience stores should be up to maturity within five years so they should not need protection further than that. It may even be the case that a food retail store enjoying an unrivalled position on a retail park by for over five years by virtue of a covenant, could have been overtrading, as their levels of traffic were being artificially raised by covenants now deemed unlawful.
In 2010 the CMA limited the length of restrictive covenants to 5 years, after which food retailers must allow competitors to occupy nearby locations. The fact that the CMA claims 20 different agreements by Tesco violated this rule could be seen as evidence of the high-risk strategy the retailer has taken when choosing new locations.
Another point to consider is that the terms of restrictive clauses only prevent nearby spaces being occupied by major competitors, which essentially comprises the other members of the big four food retailers. Up-market food stores such as Waitrose or M&S, and more significantly the discount food retailers such as Aldi or Lidl, were permitted to establish, with the latter taking full advantage. Restrictive covenants may therefore have been one of the factors contributing to the dramatic expansion of discount food retailers in recent years.
The smart money would say that this ruling will not necessarily result in any significant increase in the number of store openings in the retail sector, as this is tied to many other factors, not least the general health of the sector and its main actors, some of which are actively downsizing. However, if the market picks up, and space once again becomes a priority, this ruling could open-up new opportunities for expansion.
It has not generally been possible to assess just how significant an impact restrictive covenants have had on the marketability of key retail sites. That is until now. With the release of these spaces from extended covenants, their performance on the market should indicate just how much of a lead weight these kinds of clauses have been.
Further expert commentary alongside Richard’s can be found in this article from Property Week, published on 28 February 2020.
Jonathan is a Partner in Rapleys Town Planning team 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, housebuilders, asset managers, private developers and corporate clients.
Jonathan joined Rapleys in 2012. He previously worked for the 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.
Godwin Developments have purchased a former Pizza Hut site on Baths Road, Longton, Stoke-on-Trent, close to the town centre.
Jonathan Jones, Retail & Leisure surveyor here at Rapleys said: ‘I am delighted to have identified and acquired this prominent site on behalf of Godwin which has clear potential for drive-thru /quick service restaurants uses. Early conversations have indicated there is strong demand for out of town location and as such I am looking forward to promoting the site when it goes live!’
Stuart Pratt, group development director at Godwin, said ‘I am pleased with the speed in which we have completed this site purchase.’
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.
James is a senior associate in Rapleys’ lease consultancy team and has a wide range of commercial property experience. He has professionally represented a range of institutional landlords and private individuals, and is a RICS Registered Valuer.
He specialises in all aspects of lease consultancy work including the negotiation of rent reviews, lease renewals and lease re-gears. He also undertakes Red Book Valuations for loan security and other purposes.
James joined Rapleys in 2013. Prior to this he worked at Strettons Chartered Surveyors in London for nine years where he split his time between commercial agency, Red Book Valuations and lease consultancy.
With Ikea revealing plans to close its Coventry store in the summer, its first big closure in the UK, Russell Smith reflects on the current state of the retail market and how property strategies need to adapt in line with evolving consumer demands.
The retail market is undergoing fundamental disruption and Ikea’s Coventry store is, sadly, just the latest casualty. It probably won’t be the last, as retailers and landlords seek to rebalance their strategies and property portfolios in line with changing shopping patterns.
Larger format stores are being scrutinised closely, and we’re seeing real efforts made to try and subdivide space to ensure that every square foot is maximised – importantly that’s just not about range of product, it’s about diversity of experience and generating footfall and dwell time. Ikea aren’t alone, the same is true of the big department and DIY stores – some of which have had to go down the route of a CVA are even administration – who are rationalising their property portfolios in response to poor sales.
Retailers have learned, the hard way in some cases, that bigger is not always better when it comes to store format. Many large store concepts really struggle with design, accessibility and connectivity with the wider location and footfall. Ikea Coventry demonstrates not just the need to respond to the change in customer profile, but also the need for quality design thinking to make the most of location and footprint.
Ikea’s setback in Coventry is as much to do with location as anything else, but the retailer has made some strides overall. In Ikea’s case, the core product is flat pack furniture and, in reality, people either want to buy it online and have it delivered, or they want to go – or have to go – to an out of town fulfilment centre to collect in a car or van. Formats and locations that fall between these two poles are the ones that are going to be at risk. Ikea are therefore looking at smaller showroom format stores in affluent locations and with high footfall – such as Bromley or Hammersmith – or larger stores close to motorways or in accessible out of town sites.
Put simply, retailers have to understand that the way consumers want to buy their products has changed, and property decisions need to be made firmly in that context.
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.
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.
Daniel is Head of Rapleys Automotive & Roadside team specialising in both agency and professional matters including acquisitions, disposals, rent reviews, lease renewals, general landlord and tenant work, and valuations on properties throughout the UK. His particular specialism is within petrol filling stations, motor dealerships, roadside retail and workshop premises. He is also a RICS Registered Valuer, RICS APC Assessor and a RICS Fellow.
Daniel advises a variety of institutional and occupier clients including Pendragon plc, Mercedes-Benz Retail Group, Sytner Group, Network Rail, Columbia Threadneedle, Majestic Wine, Topps Tiles and Universal Tyres.
Daniel previously worked at Mouchel on the Bedfordshire County Council portfolio including general agency and landlord and tenant matters, and prior to graduating in 2003, Daniel completed his placement year at Bidwells, working with the agency and corporate consultancy/valuation departments.
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.
The food WAREHOUSE is one of the fastest growing retail park outlets. But can it take on Aldi and Lidl? Property Week reports.
food WAREHOUSE, from Iceland, focuses on bulk buys, value packs and pallet deals that showcase Iceland’s latest products. ‘We didn’t know if it would just be an innovative lab for the core Iceland stores where we could try ideas and products and ways of working, but very quickly it became apparent that this was a great, separate business model in its own right’ recalls Richard Walker, Managing Director of Iceland.
After just five years, food WAREHOUSE has 118 UK stores and, despite no firm targets being set, Walker is confident they will continue the current rate of 30 to 35 openings a year. With them offering an attractive covenant to landlords this seems achievable. The food WAREHOUSE provides a solution for a retail park site that might otherwise be sitting empty, according to Richard Curry, partner in Rapleys’ retail and leisure team. ‘They have taken the opportunity to take sites that other [food retailers] wouldn’t possibly consider and have become the focal point for those sites’ he says.
Curry adds ‘the brand has also benefited from the inflexibility of discount rivals Aldi and Lidl when it comes to store expansion, which need to have exactly what they are looking for or they just won’t do it’. However, it looks as though that is changing as their search parameters widen and food WAREHOUSE poses more of a threat. This isn’t seen as too much of a challenge by Walker however who states, in today’s market ‘everyone is a competitor’.
For the full story head to Property Week – click here.
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.
Richard is a partner in Rapleys’ retail and leisure group.
He has over 30 years’ experience dealing with all aspects of agency and has dealt with high street, development and investment management. He specialises in the food store sector, especially in the acquisition of convenience stores and supermarkets. He also regularly advises on the sale of trading stores.
Richard regularly contributes market insight to leading industry publications.
Richard is principal agent advising New River Retail on the asset management of their public house estate.
Richard joined Rapleys in 2006, having previously spent 3 years at Somerfield Stores, where he was property manager responsible for subletting, downsizes and disposals.
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.’
‘While looming uncertainty around Brexit has caused turbulence in many UK property markets, the trade counter sector has remained – to borrow a phrase from our outgoing prime minister – strong and stable.’ – Property Week.
“As well as buying tired buildings, investors are continuing to buy other industrial units and convert them to trade counters, says Alfred Bartlett, partner and head of the retail and leisure group at consultancy Rapleys. “We’ve just acquired a car dealership site for a client, which is being converted into a trade scheme. Another client just bought a reasonably prominent industrial terrace and that was converted to trade units,” he says.”
“It is a sign that landlords are increasingly attracted to the rental growth and strong financial covenants that trade counter occupiers provide. Bartlett says he is currently acting on purpose-built trade counter schemes in both Clacton and Tamworth that “in the past would’ve been out-of-town retail schemes”.”
“A combination of short supply and an increased focus on the general public has brought trade counters to the high street for the first time, often into units vacated by struggling retailers. Screwfix and Toolstation have been particularly acquisitive, says Bartlett, who acts on behalf of Toolstation looking for high street sites.”
“We’re in the infancy of building up portfolios. You can see some building now that will become attractive to the big funds. There’s definitely investment appetite in the trade sector,” he says.
The full article from Property Week can be found here.
Richard Curry, Partner in the Retail & Leisure team, speaks to Food Navigator about Amazon’s investment in Deliveroo. The online retail giant will lead a new $575m investment into the food delivery company alongside other investors. This investment will allow the food delivery service to improve the company’s tech team in the UK headquarters and expand further to reach new customers.
Is Amazon laying the foundations for a move into bricks and mortar?
Amazon’s move is evidence of it tapping into a growing trend for food delivery, in urban zones especially, and possibly setting the foundations for a move into bricks and mortar, believes Richard Curry, partner in the retail team at property and planning consultancy Rapleys.
If a consumer could receive Deliveroo delivery of Amazon’s range of goods, he told FoodNavigator, “that is tapping into a food market and competing with retailers.”
If Amazon were looking to set up in bricks and mortar space, he notes, then, “having all this infrastructure in place is going to be key, as most of the bigger organisations that are already established in bricks and mortar have antiquated distribution networks that are focussed on stores.”
It would also need to show a point of difference to stand out. ” Having this facility would give them that in my view.” He added that from Amazon’s perspective the investment was a ‘win-win’.
“It gives them another way of breaking into that [food goods delivery] market in its own right and at the same time if they did want to go nationwide into bricks and mortar they are setting up that to give themselves the opportunity to make that decision without it being expenditure on a gamble.
They know that the [Deliveroo] operation works and it doesn’t necessarily commit them to go into bricks and mortar but it would be required by them if they were to.”
For the full article with opinions from other experts click here.
Rapleys’ Automotive & Roadside team have been very active in East Anglia with support of service lines offered from the recently opened Cambridge office. In the attached are some examples of recent petrol filling station and roadside retail instructions. Click on the download button for full details.
For our full list of available properties click here.
The Competition and Markets Authority (CMA) today blocked the Sainsbury’s and Asda merger, confirming its provisional findings from February. The CMA said that the proposed deal would have led to increased prices in stores, online and at many petrol stations throughout the UK. Richard Curry, partner in Retail & Leisure, was among the experts who shared their reaction with Retail Gazette, European Supermarket Magazine and FoodBev Media:
“The problem Sainsbury’s and Asda faced is that there was a clear lack of credible competition for the CMA to turn to, and fewer still who would be interested in the stores that would have needed to have been disposed of.
“Particularly when you factor in the fuel retail element, the only two alternatives that offer the same product range and shopping experience are Tesco and Morrisons – who are unlikely to be interested in enough of the large format stores which might have made a difference to the CMA.
“People are still waiting to see what Amazon’s next move in the UK market will be. With the Whole Foods business, and the recent partnership with Casino in Europe, food retail is an area of interest for them.
“It would be ironic indeed were Amazon to end up buying some or all of the Asda portfolio given Walmart’s exit from the UK to focus on the US is almost entirely driven by a desire to defend against Amazon on home soil.”
Richard also spoke to Bloomberg the day before the ruling, commenting that “Sainsbury’s will be holding out for a miracle. The CMA has given every indication that they won’t approve the merger.”
Read more here.
The Competition and Markets Authority (CMA) cast doubt on the planned Sainsbury’s-Asda merger as it reports ‘extensive competition concerns’. The experts react to the findings, with partner in Retail & Leisure, Richard Curry, sharing his views with The Grocer, Bloomberg and the European Supermarket Magazine.
As reported in The Grocer, Curry comments ‘…the only two alternatives that offer the same product range and shopping experience are Tesco and Morrisons – who are unlikely to be interested in enough of the large format stores likely to be seen as problematic by the CMA to make a difference.
The CMA’s provisional findings do increase the likelihood of the Sainsbury’s-Asda deal being scrapped. However, Walmart will clearly still be looking to offload Asda and there will likely be other suitors waiting in the wings.’
The full analyst from Richard and other experts can be views in the following publications:
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.
A new Burger King which has opened at Godwin Developments’ Brampton Hut Services on the A14 near Huntingdon has already created 14 new jobs with the team expected to grow to 25 during peak trading.
Now the focus is on two further turnkey units to let on the site which will create even more jobs at the busy A1 and A14 routes.
Jason Doe, area manager at EuroGarages, who are the lead tenant on site, said: “Brampton Hut Burger King represents a fantastic opportunity for a progressive, forward thinking and rapidly expanding organisation such as the EuroGarages to bring a high-profile quick service offering to what promises to be one of the foremost roadside services currently under development in the UK.
“We very much look forward to growing our team and customer base both here and further afield.”
Letting agents were Rapleys who specialise in the retail, leisure and roadside markets.
Jonathan Jones, surveyor at Rapleys said: “Rapleys are delighted to have acted on behalf of the Godwin Group in the letting to EuroGarages trading as Burger King at Brampton Hut Services.
“The excellent traffic of the A1 and A14 combined with the critical mass of food and beverage occupiers has established Brampton Hut Services as a strong ‘Food to Go’ destination and as such Burger King will undoubtedly trade well here.
“There are now only two turnkey units available to let, one of which benefits from a drive-thru lane, and leasing enquires in the roadside market are encouraged for this rarely available opportunity,” he said.
Ketan Patel, development manager at Godwin Developments, said: “This site now offers a Greggs, Subway, Starbucks and Burger King with close amenities to a large BP Connect filling station and truck park, with a Brewers Fayre restaurant, Premier Inn Hotel close by.
“It is clearly a magnet for motorists looking to take a break and top up at this busy A14 and A1 interchange, and so the remaining two units to let provide an excellent opportunity for food outlets that are complementary to the existing local provision and add value and consumer choice.”
Godwin Development update – click here.
Today in Property Week, Nick Hughes asks ‘what impact the divestment of Sainsbury’s/Asda stores would have on the sector.’
‘A great deal for customers, colleagues, suppliers and shareholders of both businesses.’ That’s what the leaders of Sainsbury’s and Asda promised in April as the two confirmed plans for a £51bn mega-merger that, if approved, will reshape the grocery landscape with significant implications for the retail property market…
…A rebalancing of the big four’s property portfolios, although meaningful, is unlikely to significantly alter the dynamics of the grocery market; however, Rapleys partner Richard Curry floats a prospect that has the potential to change the face of the food retail landscape in the UK and send every supermarket executive into a state of high alert.
‘The CMA included (Amazon-owned) Whole Foods as part of its phase-one investigation’, Curry notes. ‘While Whole Foods itself is unlikely to take on a large-footprint Asda or Sainsbury’s unit, it does raise the question of what role Amazon more broadly will play going forward’. ‘We know the CMA is considering the impact of online retail on grocery shopping and if Amazon senses an opportunity to take on a nationwide portfolio of large units that can be subdivided to house various operations – from Whole Foods groceries to non-food and logistics – the temptation to make a big bricks-and-mortar splash will be strong indeed.’
The full article is available here on Property Week.
Godwin Developments has announced the first two occupiers, secured by Rapleys Retail & Leisure agency team, on its Pineham neighbourhood retail site in Northampton.
The Midcounties Co-operative and Blossom Tree Day Nursery will be the first two tenants on the development.
Godwin Developments acquired the 1.1 acre site from Taylor Wimpey Homes and is building 12,600 sq ft of retail and nursery space.
Co-op has taken 4,000 sq ft and Blossom Tree Day Nursery will move into the slightly larger unit of 4,550 sq ft. Other units on the site are still available and continue to be marketed by Rapleys, cick here for the marketing brochure.
Stuart Pratt, group development director and co-founder of Godwin Developments, said: “We are delighted to have secured Co-op and Blossom Tree Day nurseries as the first two tenants for the Pineham Neighbourhood centre.
“The overall development has now provided over 600 new homes as well as a new primary school opposite our site. We now have only two remaining retail units totalling 2,500 sq ft and one D2 use class unit available.”
Alfred Bartlett, head of retail and leisure at Rapleys, said: “We are extremely pleased to have effected these key lettings and that Co-op and Blossom Tree Day Nurseries as anchor tenants, have been able to envisage the strategic benefits of the Pineham Neighbourhood centre, which not only serves the new primary school development and over 600 houses coming on stream but the existing Pineham village also as well as the adjoining Prologis Park and the wider distribution and business development just off junction 15A M1.
“The remaining units provide great opportunities for complementary retail, café or food to go operators.”
Source: Godwin Developments
“Aberdeen Standard Investments has announced that it has exchanged contracts with Explore Learning, leasing a new unit at Two Rivers Shopping Centre Staines-Upon-Thames – an outdoor hybrid retail, leisure and lifestyle scheme.
Explore Learning’s Richard Curry, of Property and Planning Consultancy firm Rapleys, has worked alongside Two River’s Letting Agency – Lunson Mitchenall to secure Explore Learning with a new 1,443 sq ft unit, bringing a complementary community use into Two Rivers Shopping Centre.
The retailer has agreed the terms on the lease, and will open the educational tuition centre in autumn/winter 2018. The acquisition further enhances the portfolio of Explore learning who now have 140 centres throughout the UK and are actively looking to continue their expansion.
Since 2001, Explore Learning has helped over 200,000 children excel academically and reach their potential with dedicated tutors always on hand to encourage, explain and ensure children progress. The popular learning centre aims to inspire fearless learners: whether it’s getting ready to start a new school, meeting a new teacher or making friends.”
Explore Learning still have active requirements at several other locations, contact Richard Curry with any suitable opportunities. Full details available here.
The very public collapse of House of Fraser and Homebase highlights, once again, the need for retailers, shareholders and landlords to be realistic about the potential pitfalls and solutions created by property assets in an insolvency or distressed sale situation.
Mike Ashley offered £50m for HoF before administration, but once creditors rejected a Company Voluntary Arrangement (CVA) and it filed for administration, an insolvent HoF was worth £40m more to him and Ashley upped his bid to £90m. Why?
Insolvency versus CVA
The benefits to a purchaser of buying an insolvent company is the ability to jettison existing creditors, to negotiate with landlords to novate leases, renegotiate terms with suppliers, vacate properties and to avoid the costs of dilapidation charges to exit stores and of writing down stock. To Mike Ashley, £40m was the opportunity cost of obtaining all the same restructuring choices retailers are increasingly looking to achieve through a CVA – but with a completely free hand.
In contrast, and possibly even because of what unfolded at HoF, nearly 96% of Homebase’s creditors approved a CVA. These creditors will incur the costs of supporting the proposal but the potential upside to the company and ultimately to them, is a return to profitability and of course continued occupation of their asset.
Monthly rental payments, downsize options, rent concession periods and business rate reductions are all tools the Homebase CVA is seeking to implement. Currently 42 of its 241 stores will shut and head office jobs will go. The business plan to improve financial performance over the next three years across a significantly rationalised store portfolio will be the test of a successful CVA process and will be watched closely by the market.
CVAs, just like Administrations, are governed by the Insolvency Act 1986 but are more restrictive. Whilst there is a growing trend for retailers to seek the CVA route and categorise landlords into different pots as a means of restructuring, it is nothing new.
A decade ago, retailer The Works was under administration. The purchaser didn’t want all the stores so ahead of the sale, and to facilitate the deal being done, some stores were closed and some taken on a ‘licence to occupy’ for between a month and up to a year, allowing the purchaser to renegotiate lease terms, assess trading levels or trade out stock.
So, whilst not a new phenomenon, the pace and frequency of the CVA process is undoubtedly increasing.
Will retailers use insolvency/CVAs to ditch unprofitable stores?
A perfect storm is brewing; declining sales, increasing costs, rising business rates, Brexit-related currency fluctuations, the introduction of the national living wage and apprenticeship levy, and the rapid growth of online retailing. The result is many retail and restaurant businesses toying with CVA or even administration, as a ‘simple’ way to shed unprofitable stores.
Thankfully, there is nothing to suggest, yet, that operators are jumping the gun and using this tool to get their businesses into better shape. This may be because there is still a stigma that comes with pursuing this route and the increased corporate governance scrutiny means directors risk prosecution if their actions are seen to defraud creditors.
CVAs often allow a company to keep trading, which may prove a better outcome for creditors, long-term, than going into administration. For purchasers, buying out of administration allows an element of wiping the slate clean, enabling fresh negotiations on every element of the business, including property assets. As pressure on the high street continues to mount, it’s clear that flexibility and imagination are needed from both retailers and landlords to use property assets more creatively to prevent sizeable losses on both sides.
To learn more or discuss how Rapleys can assist contact Alfred Bartlett, Head of the Retail & Leisure Group or Russell Smith, Partner in Retail & Leisure Group. This article can also be viewed on the CoStar column.
All eyes are back on the Sainsbury’s–Asda deal after the Competition & Markets Authority (CMA) announced the start of its investigation. Should the deal progress, everyone will be closely watching what happens to the combined business’s property portfolios should the CMA force a sale of stores.
Digging below the surface, we might read this as being phase two of Sainsbury’s strategy of pushing into the discount market. Asda traditionally has a reputation for value and a core customer base which is, generally speaking, a different demographic from the average Sainsbury’s shopper. There are also geographical factors at play here, with Asda strong in the north and Sainsbury’s in the south.
In the case of retained stores, Sainsbury’s will be acquiring some significant issues. The extent to which the Asda stores holding company continues to operate and whether Sainsbury’s decides to, or is able to, guarantee the status of Asda stores may have a real impact on landlord relationships and negotiations in the future.
It is possible that we will see some sort of restructure, with retailers turning to mechanisms such as CVAs, even in businesses that are performing well, to force a conversation with landlords.
At the same time, it shouldn’t be forgotten that both Asda and Sainsbury’s sweet spot is in food retail, with many of the stores Sainsbury’s is acquiring are just too big for the market these days. The fact is that many food retailers are now facing the challenge of having significant surplus space because of historic expansion strategies – an issue Sainsbury’s itself sought to mitigate with the acquisition of Argos. Asda’s policy has generally been based on very large-volume stores and while it has a decent non-food range, the format on the whole is not optimised around the core food product.
Looking ahead, if the CMA forces a re-sale of stores, the irony is that the likely buyers are just those brands – Aldi and Lidl – that Sainsbury’s is looking to defend itself against.
Debate will continue to swirl around Amazon’s bricks-and-mortar ambitions and they will likely be part of the equation, even if they’re not going to be a realistic suitor for true customer-facing stores.
What is perhaps more interesting is whether the CMA considers the likes of B&M and Home Bargains in its deliberations. In some of their larger stores, despite having a restriction of 30% food sales, they could be offering an equivalent sales area to the likes of Aldi and Lidl.
They would be more able to maximise the space on offer in any larger stores that the CMA forces the disposal of, and could arguably compete with the discounters, as well as Sainsbury’s and Asda, on both food and non-food.
Overall, in any enforced sale the most attractive sites will likely be any freehold stores in the Sainsbury’s/Asda portfolio, which may be sacrificed by Sainsbury’s/Asda in order to fulfill the merger requirements.
Another possibility in this scenario is that if no, or limited, prospective buyers for the largest sites can be found, the CMA may be forced to consider forcing a sale of Sainsbury’s smaller or convenience stores. These would arguably be much more attractive to potential buyers and any significant convenience portfolio reduction could be a real fly in the ointment for the merger.
For further discussion or information get in touch with Richard Curry, Partner in Rapleys Retail & Leisure Group. The full article can be viewed here in Property Week as well as The Grocer and European Supermarket Magazine.
We have restructured our retail and leisure business to operate as a single, dynamic and cohesive entity in the interests of more finely responding to the current challenges, and opportunities, facing today’s market place.
Previously, the partnership’s retail and leisure offer was split into Agency, Development and Lease Consultancy services operating from four of our six offices. Now, the function will combine these services into a single nationwide team as supplemented, where necessary, by the advice of our Investment, Asset Management, Town Planning and other related services. The new retail and leisure offer, with associated services, will be across the entirety of our office network.
The new Retail and Leisure Group focuses on all areas of the sector, including food and beverage, and offers its clients a comprehensive service from deal origination through acquisition, development management, lease consultancy and disposal/exit. As part of its remit the team is addressing an increasing demand to advise and devise strategies to let vacant space, or boost the appeal of new developments or existing schemes, in the face of an ever changing market as fuelled, at least in part, by online competition. Through the combination of our national skill base and regional expertise the new Group has already been successful in working with, amongst others, operators and landlords to either source the right floor space opportunities or attract an appropriate and robust tenant mix across a number of schemes.
The new Group is headed by Equity Partner, Alfred Bartlett, who commented that “This is a progressive move by the partnership and I am delighted to be heading this exciting group within the business: the co-ordination of which has already resulted in some significant wins for national retailers, lifestyle operators, investors, developer and others. The retail market is, clearly, providing opportunities from the widely reported challenges and we look forward to assisting our clients, in the future, in realising their goals and aspirations.”
Alfred is supported by fellow Equity Partner, Russell Smith, in managing the Group. Other partners include Tim Holt and Richard Curry. A number of new appointments throughout our office network have also been recently made within the Group, including Henry Lang in Bristol, Matthew Guest and Jonathan Jones in Birmingham, Thomas Ball in Manchester and Rebecca Hughes in Edinburgh. There will be more to come.
If you would like to know more about the group, or simply wish to discuss your future requirements, please do not hesitate to get in touch. We will be delighted to hear from you.
The 2017 food retail market was characterised by the ever decreasing results and an allied lack of expansion amongst the traditional big grocers, possibly with the exception of Co-Op. Then on the other hand, there is the seemingly non-ending expansion for the budget chains Aldi and Lidl.
Early signs in the First Quarter indicate a steadying of market share:
Christmas 2017 gave stores a welcome festive boost, with sales up according to Kantar’s statistics. This was possibly driven more by seasonal and ‘one off’ offers rather than on underlying improvements in core sales.
A convenient truth
The move to acquire wholesale businesses, the Co-op/Nisa deal along with Tesco merging with Booker, opens up new opportunities for the convenience market to provide wider product ranges and mitigate the threat posed by the discounters and reach new markets.
Tesco have made noises heralding a different strategy for dealing with this new dynamic, announcing their own ‘plan’ for a range of discount stores. The example of Sainsbury’s Netto venture provides a stark warning however. To ensure a discounter programme gets off the ground, there is a requirement for a critical mass of stores to build profile and brand loyalty. It is worth bearing in mind that Lidl opened its first UK store in 1994, with market penetration only really mushrooming in the last 10 years or so and possibly assisted by economic conditions.
Simultaneously, the top end of the market is also under pressure. Waitrose are re-evaluating their optimum store size to better align their bricks-and-mortar footprint with the reality of trading conditions. Booths being put up for sale also confirms that the premium end is under intense pressure and that a critical mass of stores is necessary to defend against it.
As so-called ‘right sizing’ continues across the board there is still a legacy of sites where retailers are seeking to extract themselves from commitments, with it becoming clear that there was a degree of overstretching in the hypermarket boom years. An obvious source of new sites has been connected sites where the ‘hypermarket’ model is no longer required. Alternative uses, such as residential or a discount food/discount store mix have been sought, yet these sites could easily and equably be occupied by the Big Four. At the same time, the challenging retail environment has seen several businesses fall into real financial distress, most recently Toys R’Us. These company’s portfolios are potential investment opportunities for food retailers.
Everyone in the market continues to wait for Amazon to make a move. Clearly, the eCommerce giant is watching developments too and sizing up the opportunities. There doesn’t appear to be an active requirement for supermarket sites as yet, but that may change as Amazon gets its ducks in a row. It is likely that when a move is made, it will be a wedge-type manoeuvre in a key market, perhaps using its logistical might and growing network of urban satellite delivery systems, to establish a ready-meals service for example. Or, alternatively, we may see an acquisitive move for a business such as Iceland, which, despite the growth of Ocado, probably has the most efficient delivery network.
As we come to the end of the financial year 2017/2018 and look forward to the next, we reflect on the progress and strength of the industry. Requirements for petrol stations did not see a great decline and top dealers are still making significant deals.
The year did record a slight drop in petrol filling station numbers. This was however marginal, at just 52 fewer sites, down to 8,407 (source: Experian Catalist Market Summary Report Nov 2017). We expect a number of these are small local unbranded sites and we do continue to see a steady flow of closed down sites also re-opening. Rapleys has transactions in solicitor’s hands for a number of sites to reopen, including a site that has been closed for almost 15 years! We expect to see more new to industry sites developed and existing stock redeveloped.
Demand for sites across the board remains strong and the lack of available stock is continuing to keep both freehold and leasehold prices high. As margins remain strong this is likely to continue. If the backlash against diesel continues there could be some change in the nature of fuel demand but we have yet to see this have a significant effect.
Top 50 Dealers
In terms of the major news, we have continued to see the top dealer groups expand and at present MRH, Motor Fuels, Euro Garages, Rontec, Co-Op and Petrogas operate approximately 20% of all Petrol Stations in the country. Their numbers have been boosted by corporate takeovers of a number of the smaller groups within the Top 50. Examples include, MFG acquired Golden Cross in January, MRH acquisition of Chartman in September and Applegreen acquiring 7 sites from Carsley Group. At current rates there may not be enough groups to form a top 50!
However, in terms of numbers, Euro Garages have acquired the most by going global. Having started from a single site in Bury in 2001 they have now expanded into Europe to become the largest retail customer of Esso. They are looking further afield with the recently announced $2.15 bn deal to acquire 762 sites in the US from The Kroger Co. which suggests that the two questions are:
a) where are they going to acquire next?
b) if they are looking at the US will they have to change their name!
The last 12 months have also seen the supermarkets revisiting tying up with existing fuel operators, and again this has been met with mixed success. Recently we have seen MRH tie up with Co-op, Euro Garages with Sainsburys and Morrisons with Rontec, however of these only the latter is still on-going after a trial period. This would appear to be due to operational issues rather than a bad idea and we expect further tie ups are likely to be trialled in the future.
We have also seen the return of demand for Motorway Service Areas. There have been relatively few new developments in recent years with the new services on the M5 at Gloucester being the only notable exception. However, we are now seeing announcements and planning applications on a number of new locations throughout the UK. Applegreen are possibly the most active as they look to replicate their success in Ireland.
Ahead to 2018/19
Looking forward, the recently announced deal merging MFG and MRH could lead to a new level of super group with almost 1,000 sites. It’s too early to confirm the fallout of this deal but we could see its ripples felt for a long time.
We predict that the market will continue as the last 12 months with demand for sites to continue, corporate activity to be high and more sites to open. The last few years have seen changes and growth and we expect this to continue through 2018 and into 2019.
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.
We are continuing our expansion in the Midlands with the latest appointment of a new partner, Tony Clements, to establish and lead the town planning team in our Birmingham office.
Tony Clements joins from GL Hearn where he spent the last three years leading the regional planning teams. Tony’s appointment means Rapleys now offers dedicated retail & leisure, development, building consultancy and planning services to the Midlands area. The Birmingham office was opened in 2016 and is quickly expanding to reach the ambition of covering the full range of services for developer, investor, landlord and occupier clients.
Tony has over twenty years’ experience as a professional planner and is an experienced expert witness. He 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.
Tony has a strong track-record promoting large scale residential developments for many of the UK’s largest home builders.
Tony states: “I am excited to be joining the planning team at Rapleys at a time when there are significant opportunities to build on and expand our offer to clients in terms of technical capabilities, sector expertise and geographical coverage. I’m very much looking forward to carrying through the planning process a range of residential and mixed-use development projects that I have been working on across the midlands and nationally.
Delivering a client focused service has always been at the heart of my approach to planning consultancy and I am delighted to join a progressive and expanding team within a highly respected, independent property consultancy.”
Robert Clarke, Senior Partner at Rapleys, states: “I am pleased to welcome Tony to the partnership. He brings a wealth of experience in managing and promoting residential and commercial schemes through the planning system. He will, undoubtedly, foster and contribute to our ever expanding national planning business with a focus on the midlands market.”
With the continued demand for dessert parlours and the increase in the number of both brands and franchisees, this food and beverage (F&B) offer looks set to replicate the spectacular rise of the coffee shop culture in the UK.
Like coffee shops, dessert parlours were relatively unknown on the UK high street and leisure scene as recently as 7 years ago, but we have witnessed them becoming more and more sought after and a regular in the F&B line up on retail and leisure schemes that we are bringing to the market, both in town and out-of-town.
Interestingly, apart from the US giants, Dunkin Donuts and Krispy Kreme – both of whom have only relatively recently themselves re-entered the UK market – the current demand for sites is largely being driven by independent operators and shows little sign of being a mere fad.
Data released by The Local Data Company (LDC) and British Independent Retailers Association (BIRA) shows that independents opened more shops in the first half 2017 than in the same period last year, whilst national chains continued to fall. Café style operations, such as dessert parlours, is one of the key growth areas and this looks set to continue as independent operators, such as Patisserie Valerie – the original cake and dessert retailer with over 100 outlets – continues its organic growth and franchised operators such as Creams – who lead the franchised sector with over 50 outlets – look to roll the concept out nationally from London and the South East.
Hot on their heels are brands such as Kaspas, Treatz and Heavenly Desserts, as well as a number of newer and smaller operations, all of whom already have double digit outlets in multiple locations with a variety of trading formats – operating on high streets, in shopping centres and on out-of-town retail and leisure schemes. These operators have all evolved to take advantage of the culture developing among young people, students and families of going out in the evenings for a dessert. Just like the quick service restaurant franchisees, the fortunes of these operators also look set to soar and accordingly add incremental value to the property assets they occupy.
If the coffee shop experience is anything to go by, watch out for the rise of dessert parlours!
We expect demand to continue to increase along with the profile of dessert parlours in retail and leisure schemes alongside the more established usual suspects – and there is a long list of operators they like to sit next to! Not only should the line up and marketing of schemes be geared to accommodating this use, but consideration should also be given to the design of centres to welcome these operators as part of the leisure mix.
Rapleys is able to advise on the development/redevelopment of schemes to appeal to this wider market, as well as identify the appropriate operators to create a vibrant retail & leisure destination. For more information, please contact Alfred Bartlett.
“The opening of a new foodstore at a Birmingham mixed-use development is expected to trigger interest in the site from would-be tenants.
The new 13,000 sq ft M&S Foodhall is acting as the anchor tenant of the scheme, which is situated on the corner of St Mary’s Row and Oxford Road in Moseley.”
Alfred Bartlett, Head of Rapleys’ Retail & Leisure Group, said: “This is a landmark scheme for Moseley and the surrounding local area that has significantly enhanced what was previously a dilapidated car dealership site.
“M&S’ occupation is a real boon for the development and we anticipate significant and continued interest in the remaining two commercial units.”
View the full article at TheBusinessDesk.com
There is a growing trend throughout the grocery store sector to build on top of existing stores to deliver new homes. Property Week recently reported on the concept stating that “numerous retailers have explored the potential of doing air rights developments”.
Richard Curry, partner in Rapleys’ retail & lesire group, was quoted in the article stating that is not just the grocery sector but also retail stores and retail parks which could benefit.
“There is an avenue to be looked at here,” he says. “And I don’t think the DIY retailers are going to be as affected by loss of trade as some of the grocers, who are potentially losing out on customers doing their weekly food shop [while building works take place].”
Read the full article in Property Week here.
The UK’s food retail sector has seen a significant shake-up in recent years. Challenges caused by e-commerce, changing consumer habits and the rise of challengers such as Lidl and Aldi has seen many operators reassess their property portfolios and requirements.
Richard Curry, partner in Rapleys’ Retail & Leisure Group, recently spoke to Property Investor News about the food retail property investment market.
He states that there is now “an environment where food retailers are being far more selective in terms of their store requirements as they streamline product offering. Investors must therefore be similarly selective over their acquisition strategy.
Fundamentally investors should, like food and retail occupiers, prepare to take affirmative action to ensure efficient and profitable portfolio performance in what is an increasingly dynamic and changing market.”
Click the link to the right to read the full article published in Property Investor News and find out more about the factors influencing the market, the changes in optimum store size and the challenges and opportunities for the sector.
For more information, please contact Richard.
Matt Greenaway, senior associate in the Rapleys Retail & Leisure Group, comments on food-to-go brands and drive-thru’s in the latest Trade Counter supplement of Property Week magazine.
“As versatile as they are, food-to-go brands do have certain preferences – units of around 1,000 sq ft are usually the best option for food-to-go brands.
Ideally, they prefer units in visible and accessible locations within estates where they can capitalise on visitors to the trade parks and passing customers, but we won’t see freestanding drive-thru restaurants and coffee shops included in many schemes unless they occupy the most prominent main-road fronting locations”.
He believes that in-line units or, more likely, pod units, where landlords can generate attractive rents from small spaces, will become more common.
Read the full Property Week article online here.
According to Kantar, the figures for the period 09/10/2016 –29/01/2017 showed that the food sector held up well over the Christmas trading period. Fears that a repeat of previous years’ food shopping patterns proved unfounded for the majority.
The market share figures from 9 October 2016 to 29 January 2017 has adjusted to:
The “Pre-Christmas large shop” returned and was followed by a slow down over the remaining period with customers using top up shops as the preferred pattern of food shopping.
Morrisons reported their best results in 7 years, like for like sales up 2.9%. J Sainsbury up 0.1%, reported that the integration of Argos has been boosting sales especially in toys and electrical goods. Aldi up 11.8% and Lidl up 7.5%, both outperformed everyone else in the sector. Waitrose was up 2.8% over the same period with Booths up 2.6% and M&S Food sales up 0.6%. The biggest loser was Asda, down 2.4% on like for like sales.
In the convenience store sector, Co-op (sales up 3.5%) announced the increase in its portfolio of a further 100 stores for the last year, promising another 100 stores for this coming year. This may prove to be a difficult task as last year’s acquisition programme was made easier by the acquisition of some of the My Local and Budgens trading stores which gave them an immediate hit, accounting for 20 of the 100. They have a rollout programme through the New River Retail pub estate, which will account for some, however with the renewed interest in acquisitions by the regional Co-ops, Costcutter, Spar and Tesco which is back opening its Express format, this may prove to be an ambitious target.
Online shopping still proved to be an increasing area of sales as a percentage of the whole, however the feeling remains that there needs to be a change in costs in order to establish the sustainability of this service as a viable sale point for the future.
Ocado recently announced an increase in pre tax profits of 21.8% for its November year end. This was tempered by concern over the effect of Amazon’s introduction in the market. Amazon recently announced they are to increase the amount of space they wish to take in and around the Greater London area in order to service their food delivery offer.
Perhaps the biggest announcement so far in 2017 was the merger of Tesco with Booker which, despite being subject to CMA approval, is generally being welcomed by the respective retailers and individual traders in the Booker family of Londis, Budgens and Premier Food. Nevertheless, there will be major concerns amongst other operators such as Costcutter, Spar and Nisa which will no doubt be objecting to the added possible influences of Tesco in their traditional smaller store sector. Other mergers or alliances might be considered in this sector if this was to be given the go ahead. The other interesting point to note from this would be the access that Tesco will be getting to the catering market which has a higher margin, i.e Booker currently supplies to operations such as Wagamama. It is noticeable within the industry that foodstores and supermarkets, most notably Waitrose, are incorporating catering units within stores such as sushi bars and pizzeria counters in order to increase their margins and sales.
Key point to note
Aldi has overtaken the Co-operative as Britain’s fifth biggest supermarket
If you have any questions about the above, please contact Richard Curry – firstname.lastname@example.org.
Drive-thrus started life in the USA in the 1940s, but they still feel like a relatively new concept in the UK.
However, the rising demand for and value of prime roadside sites suggests that the format is now well established here.
Most often associated with fast food chains – McDonalds opened its first drive-thru in 1975, the year after it opened its first “In-line” restaurant in the UK – it’s the coffee chains that have been leading the charge in recent years. Starbucks is understood to be close to having 200 drive-thrus in the UK. Costa currently has around 40, but has ambitions to triple that.
Established grab-and-go players such as McDonalds, KFC and Burger King now vie for sites – and customers – not just with coffee houses, but a wide range of new entrants to the quick service restaurant sector such as the Canadian coffee and doughnut chain, Tim Hortons, who provide an all day food and coffee offer that sits alongside both the coffee and fast food operations.
Global brands such as Taco Bell and Krispy Kreme have also bought in to the roadside/drive-thru concept.
There is even interest from outside the food and drink sector from the likes of financial services firm Metro Bank, which opened its first drive-thru in Slough in 2013, allowing customers to drive up to the bank and carry out transactions without leaving their vehicles.
Whether the idea will catch on with other banks – or even dry cleaners (Johnsons have dipped a toe in the market) and other businesses – remains to be seen, but what is clear is that the increasing number of businesses eyeing the drive-thru arena will affect the market as the supply of prime sites on busy road networks shrinks.
The change in demand
Historically, operators have favoured footprints of 1,800-2,500 sq. ft. All the drive-thru operators of course provide a sit-in option, which at the larger end of the requirement scale mean that site requirements can be as much as half an acre when you take into account drive-thru lanes and parking.
The lack of site options means operators are being forced to adapt their requirements – by squeezing on to smaller sites or buildings over two storeys.
Traditionally, coffee outlets have tended to prefer sites which are inbound to cities, so people can grab a drink and a snack on the way to work, while food outlets prefer an outbound site so that people can grab a ‘take out’ on their way home. Again, this model is already being compromised by space constraints.
The best sites provide a high volume of traffic flow, prominent positioning and good access points. There may also be additional sales drivers nearby – such as office and business parks, leisure centres, trade parks or hotels.
Generally, demand is such that the best sites may be attracting rental income in excess of £30 per square foot, which can make the market very attractive for landowners.
Drive-thrus will also look different in the future, as clever design is used to compensate for the pressure on space, but their continued success is assured: time pressures and the need for convenient solutions will continue to drive demand.
Rapleys provides comprehensive advice on drive-thrus and the wider retail and leisure market. For more information please contact Alfred Bartlett.
Rapleys is pleased to share some of our most recent agency transactions in our latest newsletter.
We are also happy to share some of our currently available properties. A full list of our properties can be found in the property section of our website. Please get in touch if you require more information on any of our available properties.
To view our latest newsletter in full, please click here.
Property Week 20/01/2017
Most of us contemplate any dealings with a car salesman with a sense of dread. Sure, you get a car at the end of it, but first you have to endure an over-enthusiastic dealer, hell-bent on expounding the merits of heated car seats whether your budget allows it or not.
Not any more. These days, more and more car manufacturers and dealerships are electing to trade from shopping centre malls and high streets where they can offer customers something more experiential and informal – and, crucially, using less space.
Daniel Cook, Rapleys Senior Associate from the Automotive & Roadside team provides comments on new shopping centre showrooms and what threats they have on traditional showrooms.
Read the full Property Week article click here
Rapleys has arrived in Birmingham! In May, Rapleys opened its sixth office, moving into Birmingham for the first time following the acquisition of Bartlett Property. Led by Alfred Bartlett, the team is growing and will become a significant player in the West Midlands property market over the coming years, offering the full range of Rapleys’ services.
It is a home coming as well as being business as usual for Alfred Bartlett. He first joined Rapleys 25 years ago and left to work in Birmingham. Now back together, Rapleys’ Birmingham office under the leadership of Bartlett, continues to advise on retail and leisure developments across the region. Bartlett’s team in Birmingham has been strengthened with the recent addition of Matt Greenaway as Senior Associate from Bilfinger GVA and Charlie Steele, Surveyor from Steeles Estate Agents.
Matt and Charlie, along with Alfred, will focus on sourcing and bringing both city centre and out of town retail, supermarket, restaurant and mixed use schemes forward and have hit the ground running with some notable instructions including:
- Advising on two mixed retail student accommodation developments in Edgbaston
- A retail development for Co-op, close to the city centre
- A new mixed use development with Marks & Spencer and further retail in Moseley
- Redevelopment and letting of an existing retail park in Brierley Hill
The team is actively on the lookout for development opportunities for occupiers and developer clients and is also instructed on a number of retail, leisure and development site disposals.
Rapleys is looking to expand its Birmingham office to provide a full service offering including planning, building surveying and project management, office and industrial agency, investment consultancy and rating.
For the time being the Rapleys team is focused on establishing the office as a hub of excellence for Birmingham’s flourishing city centre developments, to provide both developers and occupiers with expert advice to take advantage of the opportunities available during this renaissance that Birmingham is currently experiencing.
Please contact Alfred Bartlett email@example.com or Matt Greenaway firstname.lastname@example.org for further information or details on how we may assist you with any retail, leisure or roadside opportunities.
The food store sector continues to be a difficult and highly competitive industry with fierce competition for the best locations and diminishing or no interest for lesser sites that previously would have been considered.
From the period April 2016 to October 2016, according to Kantar, the division of the spoils has swung significantly to the discounters Lidl and Aldi, from the big four, and continues to do so. We must now consider that there is the big six.
According the Kantar World Panel for the six months ending the 9 October 2016, market share has adjusted to:
For large format food stores, priority has been to consolidate and reorganise existing estates and trading operations. Asda, Sainsbury’s, Tesco and WM Morrison have all been looking to offload areas of surplus car parking, for example. Land bank sales, contraction of larger stores, straightforward disposals, or in the case of Sainsbury’s, the cessation of Netto, are being prioritised rather than taking on new trading space.
Discounters have not only contributed to this situation but have also benefited as a result,
being able to acquire the offloaded space or sites that have been made available.
Conversely, the premium brand large format operators have been active, although not immune to the price war and discounters.
Rapleys have recently advised Booker Retail on the disposal of two of its trading stores to Waitrose for its 7,000 sq.ft sales area ‘convenience’ format store. In addition, they have been committing to a pipeline of larger stores currently under construction. Recently however, it has been announced that 6/7 of these larger store commitments have either been shelved or withdrawn.
M&S has acquired a number of sites for future development in a variety of locations and developments for their Simply Food format and continue to expand their representation in PFS sites.
Convenience store activity has also suffered, principally due to competitive pricing and tightening margins. The result has been the loss of My Local (following on from M Local) and Budgens being acquired by a wholesaler (Booker) to become its high end brand fascia.
Rapleys advised My Local Convenience Group, owned by Greybull Capital, in the sale of more than 40 stores prior to the retailer going into administration. Sizeable packages of stores were sold to Southern Co-Operative, The Co-Operative Group, Midco, Central England Co-Operative and AF Blakemore (Spar).
The Co-Operative Group also acquired 14 trading company owned Budgens stores following Bookers takeover of Musgrave Retail Partners.
Nevertheless, the convenience store market remains active albeit selective. All operators are having to reassess sites on almost a monthly basis due to the high level of competition and pressure on margins.
Similarly to the supermarkets, the convenience operators are refining optimum store size based on range, location and format. We have recently seen the Co-Operative Group not only disposing of their larger stores to Hilco and other traders, but also disposing of all their smaller sites (approximately 220) to McColl’s. The current policy being to operate from an estate of stores of approximately 4,500 sq ft GIA.
Acquisition policy appears to be heavily weighted towards the acquisition of existing trading stores as these not only offer an immediate contribution to EBITDA but also enables the store to ‘mature’ sooner.
‘Virgin’ sites are now heavily scrutinised due to higher thresholds needing to be reached—the result of tighter margins. Accordingly, currently Tesco and Sainsbury’s have almost no requirements at all.
It’s not all gloom though, there are signs of recovery at both Morrisons and Tesco’s larger formats, the discounters remain highly acquisitive and M&S is making positive approaches on a number of new developments. In the convenience sector, The Co-op, Blakemore, McColl’s and other independents remain particularly expansive. There are rumours that Tesco Express and Sainsbury’s Local are now looking to re-enter the market.
Despite Ocado having been in the online and home delivery market for some time and the announcement that Amazon is to join in, the jury is still out as to whether this sector will deliver!
If you have any questions about the above, please contact Richard Curry email@example.com.
When it comes to neighbourhood stores, convenience is all very good, but blanket saturation can be downright detrimental.
Has the UK convenience store sector reached saturation point? That’s what a new report published by the Local Data Company (LDC) in June appeared to show. The report, which studied the growth of convenience stores over a five-year period, found that although the total number of stores in the UK had grown from 13,617 in 2010 to 16,426 at the end of 2015, a number of convenience store formats experienced a decline in operational stores. Additionally, 228 UK towns saw a net loss in convenience stores in 2015.
So has the UK convenience store market run out of gas? LDC data shows that of the 14 convenience store fascias studied for the report, five endured a fall in store numbers last year, namely Londis, Tesco Metro, Mace, Budgens and M Local (which was later rebranded My Local). Some of these falls were a result of rebrandings rather than store closures, although the demise earlier this year of the My Local format – formerly owned by Morrisons – underlines how challenging this sector is at the moment, according to Matthew Hopkinson, director at LDC.
“It is not an easy market to enter, as Morrisons discovered to its cost when it opened 140 stores, many in old Blockbuster shops, only to close them all less than two years later,” says Hopkinson.
The sector is extremely competitive, Hopkinson adds, and is now facing new threats from e-tailing. “Competition is fierce, costs are high and increasingly there is talk of a resurgence in online groceries that might be accelerated by Amazon’s entry into the UK market,” he adds. “There is much jockeying for position and consumer spend among large-format supermarkets, convenience stores and the discounters. Further change and casualties can be expected when everyone has to operate a healthy margin to survive and innovate.”
It is a view shared by Louise Etherden, associate partner at location specialist CACI. “The ‘c-store’ market has definitely become a lot more competitive and the rate of growth has slowed down quite a bit,” she says. “Retailers are putting more thought into the locations they’re opening, and they are spending quite a lot of time making sure they’re getting the right store in the right location and getting the ranging right.”
They are also making sure that they pay the right price for locations, according to Richard Curry, a partner in Rapleys’ retail and leisure team. “A lot of the recent slowing up is because developers have been paying more and more for sites and the only way they can make this work is to keep bumping up the rent on c-stores,” he says. “So I think the c-store operators have decided enough is enough because there is only so much trade to be had out of an area,” he says.
Another reason behind the recent fall in c-store sites in some locations is natural portfolio churn, with retailers closing weaker-performing stores when better locations in the area become available. “It is a normal part of the property ownership cycle to churn your estate,” says Steve Rodell, managing director at Christie & Co, which acts for McColl’s.
“When McColl’s put 100 sites on the market last year, everyone was on the phone to us saying: ‘What’s wrong with McColl’s – is there a problem?’ But what you’ve seen happen in the past few months is McColl’s has just bought 300 really good-quality Co-op stores and is selling out 100 of its bottom-end confectionery, tobacco and news outlets and some other bits and pieces in between. The grocery retailers are always churning sites.”
A number of retailers, such as Sainsbury’s, Spar, Costcutter and the Co-op, are also currently in the market for more c-store opportunities. As a result, Richard Petyt, partner at Knight Frank and formerly of Asda, does not see demand waning any time soon.
“I think the convenience format with the bigger retailers is here to stay,” says Petyt. “They’ve been doing it for a number of years and they are very good at it.” However, he says it will be a challenge for these retailers to turn a profit due to the competition from discounters and the fact that their cost base is set to rise as the new minimum wage comes into force.
Petyt expects further c-store openings in locations such as London, where retailer demand is still strong, with fewer openings in weaker locations in regional towns where the demographics are not so promising.
Etherden concurs, adding that CACI’s research shows while London is well saturated with c-stores, because there is a lack of superstores and less competition from discounters more money goes through convenience. “Many of the northern cities such as Halifax, Liverpool, Warrington, Wigan and Huddersfield are relatively underserved for convenience, but there is a strong presence from the discounters,” she adds.
Don’t believe the hype?
Not everyone is convinced that the c-store sector will keep on growing. One naysayer is Fraser McKevitt, head of retail and consumer insight at research and data consultancy Kantar. “In terms of the general pattern of convenience, we think the whole story about convenience being a boom area has been massively overstated,” he says. “Where we have seen growth, we’ve seen a lot of it supported by store openings and those store openings for the big guys are to some degree cannibalistic.”
He also says the “media narrative” around consumers shopping little and often and abandoning the traditional big shop in favour of the local c-store doesn’t hold water. “Our numbers don’t support that,” says McKevitt. “What we’ve found is that people are moving their money out of the big stores, but they are moving their money online, or they’re doing smaller shops in the big stores and in the discounters, leaving the convenience sector as a little bit of a sideshow.”
At the moment, the numbers don’t provide any real clarity as to whether or not the UK c-store market has already reached saturation point, or if we are merely in the middle of a temporary slowdown. But the continued rise of the discounter groups and the lack of strong c-store sites at affordable rents suggest that the future rate of expansion will not be as fast as it has been in recent years.
“This is the future.” Four fateful words wielded by ex-Tesco CEO Philip Clarke as he unveiled a radical reinvention of his Watford Extra in August 2013. The most high profile launch of a supermarket in years, the £12m refit boasted a brand new layout with low-slung fresh produce aisles and a sleek F+F concession sprawled across 80,000 sq ft.
It also featured Clarke’s latest acquisitions displayed under one roof: the modern-rustic Euphorium bakery, the charming Harris + Hoole coffee shop and the bright and colourful Giraffe restaurant. Ten months after posting Tesco’s first profit drop in 20 years, Clarke had hedged all his bets – wagering a reported £12m – on this Watford vision.
But it didn’t deliver. After an initial spike, sales “slipped back into negative like for like” says Bryan Roberts, global insights director at TCC. And within a year of the Watford launch, Clarke had been booted out, setting off a chain of events that ultimately saw new CEO Dave Lewis slash capital expenditure, call a halt to the space race, cancel several projects and close a number of existing stores.
With Tesco’s big four rivals also in retrenchment mode the property sector is the quietest it’s been for years. But that doesn’t mean developers have had to shut up shop. So who’s building what, where and why? And how have Tesco and its rivals evolved their stores in Watford’s wake?
Tellingly, many features Clarke pushed through at Watford have been adopted elsewhere by Tesco. Low level fresh produce counters now appear in revamped Tesco Extras nationwide and non-food has followed Watford’s lead by adopting a more “John Lewis” approach, says Roberts, with a slicker, less commoditised look. Bigger health and beauty departments have also popped up offering in-store treatments.
Stripped back electrical ranges are now more commonplace thanks to the trial store, adds David Gray, senior analyst at Planet Retail, with a greater focus on higher margin categories like homeware and clothing. Click & collect kiosks equipped with digital touchscreens have also been rolled out.
Lewis has also pushed forward with Clarke’s plan for more concessions. With 248 hypermarkets in its portfolio (three times more than Sainsbury’s and nearly eight times as many as Asda) Tesco has more reason than its rivals to reinvigorate out-of-town stores as destinations and Clarke’s approach was a “good proposition” adds Gray. Concessions “increase dwell time, customers stay in store longer, and in theory you increase sales”.
Rollout has been limited but steady. Fourteen Tesco stores now have Giraffe restaurants, 29 have Harris + Hoole coffee shops and 63 have Euphorium bakeries. In October 2015 Lewis signed a deal with Arcadia to open Dorothy Perkins, Burtons and Evans concessions in Tesco, and earlier this month took control of Harris + Hoole in a move that put paid to rumours he would ditch the coffee business.
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Ministers’ plans to boost high streets by extending Sunday trading hours will not be “game-changing” and are unlikely to be a boon for supermarkets, according to retail experts.
On Tuesday, the government announced that Sunday trading laws are to be scrapped by the autumn, meaning councils will have the power to allow large shops and supermarkets to open for more than six hours on Sundays.
John Witherell, senior director in CBRE’s retail team, said he believes that the proposals are “not going be the game-changer the government thinks they will be”.
Independent convenience stores had campaigned most strongly against Sunday trading reform out of fear that trade would shift to larger stores.
However, Witherell said that supermarkets, which themselves have built large estates of smaller stores in recent years, were unlikely to see any significant benefit either. “All that will happen is that sales will be spread over a longer trading time, but they will also have higher operating costs,” he said.
Ministers are hoping the new approach will give Britain’s retail sector a boost. However, Ed Cooke, head of policy at the British Council for Shopping Centres, said the policy was misguided. “If the government was going to do anything to save the high street, it should be to reduce business rates,” he said.
An amendment will be added to the Enterprise Bill, which is currently passing through parliament, to enable the changes. Under the legislation, councils will be able to set ‘zones’ where the new hours will apply, meaning that they can exclude some areas. So far, few have made clear what their policy would be, but Cooke added that the legislation may enable them to “set arbitrary red lines around shopping centres”.
Witherell said council boundaries would also be an issue, particularly in large cities with multiple high streets, which could see a “bizarre situation where large shops on one side of the street will be able to open longer hours, while those on the other side cannot”.
Russell Smith, head of retail at planning consultancy Rapleys, added that a “tug of war” could ensue between local authorities, with less affluent ones being keener to embrace longer hours, and neighbouring councils feeling pressured to increase theirs to “keep up with the Joneses”.
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