The Brief
Sector: Industrial & Warehouse
Services provided: Professional Services: Rent Review, Dilapidations Advice, Agency & Development: Lettings
Challenge: The client, an astute investor in the industrial sector, had recently acquired a large industrial yard featuring several aged structures, with a vision to enhance its investment value. The acquisition came with its share of challenges; the property was subject to a short-term lease nearing expiration, with multiple periodic rent reviews left unimplemented by the previous landlord. These reviews were based on an unconventional mechanism for potential rental increases, adding layers of complexity to the situation. The primary goal was to maximise the return on investment by implementing past rent reviews and preparing for the lease’s imminent expiry. The client sought to establish a sound strategy for statutory renewal proceedings or, alternatively, secure a new tenant without compromising any legal claims against the current occupant.
The Solution
In collaboration with legal experts, Innes England provided a comprehensive assessment of the lease’s status, including the feasibility and financial implications of retrospectively implementing rent reviews.
Retroactive rent review implementation: Innes England acted as an advocate to enforce previous rent reviews, leveraging input from solicitors to strengthen the client’s position.
Advisory on lease expiry: Offered preliminary advice on potential statutory renewal proceedings, including an estimation of market rent and terms.
Dilapidations negotiation: We engaged in negotiations regarding terminal dilapidations, utilising existing costings and providing tactical advice considering potential statutory limitations under Section 18 of the Landlord & Tenant Act 1927.
Collaboration and expertise: Our Agency & Development team, renowned for its active presence in the region, worked alongside the Professional Services team in identifying a replacement tenant and ensuring a seamless transition. This collaboration was instrumental in avoiding any actions that could weaken the landlord’s claims against the outgoing tenant.
The Results
Outcome achieved: The client benefitted from a dual victory – the successful implementation of overdue rent reviews and a strategic exit of the current tenant without the need for statutory renewal proceedings.
Client benefits: By adeptly navigating the complexities of rental reviews and lease renewals, Innes England secured a new tenant promptly, ensuring the client’s investment continued to yield returns without disruption.
Conclusion
Innes England’s strategic approach to managing the industrial yard’s transition was a testament to their comprehensive expertise in commercial property management. Our ability to advocate for and implement past rent reviews, navigate the intricacies of lease expiration, and negotiate terminal dilapidations while considering statutory caps reflects a deep understanding of both the legal landscape and the market dynamics. The successful re-letting of the property, executed seamlessly and without detriment to the landlord’s interests, underscores Innes England’s position as a leading commercial agent in the region.