Acres of space for HRC

Rapidly expanding Manchester law firm, HRC Law LLP, have today moved into Acresfield, a refurbished Grade A office building which overlooks St Ann’s Square in the heart of Manchester City Centre.

Communal breakout areas for informal meetings and events.

HRC had set TAG a very challenging brief which included 100% growth space, a Grade A specification, high quality communal break out areas, a central location, a short term break option, minimal upfront capital costs and low annual outgoings. Set these criteria against a backdrop of a booming Manchester economy and a limited supply of Grade A office space and you can see why we were feeling slightly under pressure!

Fully fitted space with desking, file storage, power and data cabling already installed.

What we managed to find was something we often tend to focus in on when representing high growth companies namely, “tenant space”. We soon identified a suite of 4,800 sq.ft. that benefitted from an existing tenant fit-out and a lease that had just three years left unexpired.

The space featured quality meeting rooms, break out areas and extensive structured cabling. Thankfully, we were able to negotiate competitive terms for the assignment of the lease which included a significant reverse premium and the majority of office furniture.

Because the lease had been entered into in 2014, the passing rent was much lower than the rent currently being quoted by the landlord on vacant space elsewhere in the building. This added to the appeal of the property when compared to other opportunities. Also, the fact that the lease had full security of tenure protection means HRC should have the option of renewing it in three years' time, if they wish to.

High quality meeting rooms including furniture and audio visual equipment.

According to Helen Marsh of HRC Law, TAG managed to find an ideal solution to what was a challenging brief; “we needed a larger and more attractive working environment but as a growing business we also needed to manage our costs carefully. The solution that TAG has secured for us is exceptional on all fronts and allows us to grow in a sustainable way for the benefit of our staff and clients. The overall result has exceeded our expectations and we look forward to setting TAG another re-negotiation or relocation challenge in a few years’ time!”

Are we over-playing the effect that property has on productivity?

There has been lots of research to support the notion that good office design has a positive impact on the productivity of staff. However, the results of the latest ‘Great Places to Work’ survey pose some awkward questions for those trying to sell to glamorous new office space to would-be tenants.

I have just read the results of the 'Great Place to Work' (UK) 2016 survey (see www.greatplacetowork.co.uk) and found it interesting that none of the measures used to rank the winners appear to relate to the physical or locational needs of staff. This raises an obvious question, how important is office design and specification to productivity? Indeed, to what extent do employees' responses to questions such as 'Do you look forward to coming to work here?’ correlate to the "funkiness" of the office or their average commute time? 

It would appear that no matter how many table tennis tables you invest in or how close you locate to a tram or tube stop, unless you have the right leadership and culture it will be impossible for you to create a great place in which to work. The burning question for real estate professionals like myself therefore, is whether the quality of the carpets or the speed of the lift car are irrelevant. If they are, then developers, architects, interior designers and surveyors ought to take note. Ultimately, we need to know whether more emphasis ought to be placed on people rather than on shiny new hi-tech buildings with elaborate fit-outs. The fact that this year’s winner in the ‘Large’ category (Softcat) tends to occupy low rent, refurbished office space, suggests that the answer to that question is an emphatic ‘Yes’.

If this conclusion is right, we might well be over-designing and over-specifying our office buildings. We might even be building them in the wrong places! This is important because commercial office buildings have a huge impact on our environment and economy. In other words, getting this stuff wrong is costly for us all.

The challenge is that few on the producer side (i.e. architects, developers, property agents) have an incentive to "de-specify" their product as this would theoretically reduce rents and capital values or at least, slow down their growth. There is therefore a real danger that we will continue to waste valuable resources and make it even harder for our businesses to invest effectively in the one thing that makes them great, their people, rather than their premises.

This is a complex issue and no one size fits all, as we know. But maybe these types of HR survey could be combined with property and FM surveys such as the Leesman Index (see www.leesmanindex.com), to create something even more powerful and insightful?

Stressful Survey

It is not every day that you are asked to assess the condition of a 16th Century Grade II Listed building in the middle of a football match.

One of our building surveyors recently undertook a building survey of a rather interesting leisure property that dates back to around 1540. The ‘Next Door’ bar and restaurant sits in a prominent location in the pretty village of Odiham in Hampshire. However, its construction is not quite as idyllic as our senior building surveyor John Crowley soon discovered.

The property is a complex mix of ages and construction techniques. Not only this but many of its quirks are only visible once hidden voids are investigated. This revealed some fairly significant issues that will require either rectification or a discount to the purchase price.

The biggest challenge for John though, was crowd management. Unfortunately, on the day of the inspection England were scheduled to play Wales in the 2016 European Football Championships. The kick off was set for 2.00pm by which time the bar was packed making life a little difficult for John who by then was just halfway through his inspection. Always looking on the bright side, John concluded, “Thankfully England won 2:1 otherwise there might have been far more items of disrepair for me to list in my report!” It’s a good job we didn’t tell him his next pub inspection was on the day of the Iceland game!

Crimeline Settlement

The Landlord’s original dilapidations claim was £36,000. We negotiated this down to £9,500. That’s a reduction of 74%!

Late last year we were instructed by a company that had already vacated its offices in Wigan. Its landlord had instructed a national firm of surveyors and a very well known legal practice to help them recover what they believed were damages owed to them as a result of the tenant failing to observe its lease obligations.

The landlord’s claim amounted to over £36,000 which seemed rather high to our client. Hence their call to us.

On closer examination, it became clear that Crimeline’s landlord was claiming significantly more than it was strictly entitled to. After several months of negotiation the landlord’s position retreated first to a figure of £17,000, then to £12,500 until finally, a figure of £9,500 was agreed.

This case once again highlights the risks associated with dilapidations claims and the need to prepare early and not be swayed by a landlord’s initial claim however well supported and reasoned it might appear to be.