ERM appointment

The Tenant Advisory Group (‘TAG’) has been retained by the world’s largest environmental consultants, Environmental Resources Management (‘ERM’), to advise on a national portfolio of offices that include the company’s headquarters in the City of London.

The appointment will involve TAG undertaking lease renewals, acquisitions and due diligence in numerous locations throughout the UK.

The appointment is an endorsement of TAG’s exclusive tenant focus. As TAG’s founder, Martyn Markland, explains “ERM’s previous adviser was a well known international property consultancy but because that firm advises two of its landlords, ERM became concerned about the potential conflicts of interest that might arise in future transactions. Our exclusive tenant focus means we avoid such conflicts. This means we can give clients a level of assurance that other advisers are sometimes unable to.”

Environmental Resources Management (ERM) is a leading global provider of environmental, health, safety, risk, social consulting services and sustainability related services. It has over 140 offices in 39 countries and territories employing more than 4,700 people.

Just the ‘Tonnik’

The Tenant Advisory Group has been appointed by Danish furniture manufacturer and retailer ‘Bo Concept’ to provide property advice in relation to its Manchester store.

TAG will undertake negotiations and due diligence for the new operator of Bo’s Manchester franchise, Tonnik Ltd which is run by husband and wife team, Nicky and Tony Wall.

BoConcept have been designing and manufacturing design contemporary furniture for almost 60 years. Founded in 1952 by two gifted Danish craftsmen, BoConcept has grown from a small furniture factory into Denmark’s most global retail furniture chain with more than 230 stores in over 50 countries. It still designs and manufactures furniture in Denmark.

Rating Revaluation Postponed

In a shock announcement, the Government has said that it intends to delay the Rating Revaluation from 1st April 2015 to 1st April 2017.

Although the announcement was made with predictable “positive spin,” the decision is in fact a deeply negative one for English ratepayers, with the exception of some in London.

The issue is a complex one, but the 2015 revaluation was undoubtedly going to deliver a wide measure of relief to ratepayers stuck with high Rateable Values that were derived from the “pre-crash” rental values of April 2008. The “re-basing” of rating assessments to much lower (anticipated) rental values as of April 2013 would have delivered welcome relief to many.

According to TAG’s rating expert, Michael Blank, “It is universally accepted that we would have had a period of steadily reducing rates bills on many properties. Now that prospect has apparently receded by two years, this is the reality of todays’ announcement.”

Michael Blank will be lobbying the government to reverse this deeply business-unfriendly move and we urge all ratepayers to do likewise.

Shorter leases here to stay?

According to the latest research, the average length of a lease on a commercial property in the UK now stands at a record low of 4.8 years.

The report published by the BPF (British Property Federation) and IPD was based on a survey of 100,000 retail, office and industrial leases.

The data shows:

• Average leases lengths have fallen from 6.2 years in 2007 to 4.8 years in 2011

• Lettings to SMEs are even shorter, at 4.1 years

• 78.3% of newly granted leases to SMEs in 2011 were under five years in length, 19.2% for up to 10 years and only 2.1% up to 15 years.

• High streets retail units saw a further reduction in lease lengths, falling from 7.7 years to 7.6 years (in 2007 they were 9.7 years).

Martyn Markland of the specialist property adviser Tenant Advisory Group says that the trend is likely to continue. “The pressure on Landlord’s to let vacant space means tenants can now secure much shorter leases and more regular break options. This is good news for UK business tenants who have had to endure some of the longest lease lengths in the world. On the continent for example, most leases tend to be three years in length. Ultimately, shorter leases will benefit landlords as they will increase the number of tenants that are able to move which should speed up the letting process. The challenge remains with funders who regard shorter leases as less valuable which is why landlords have historically been so resistant to them.”