Last year (2018), Barker Storey Matthews- now part of Eddisons  Simon Burton was appointed as Chair of Suffolk Chamber of Commerce in Bury St Edmunds after occupying the office of Vice Chair for three years. In his role as Chair, Simon joined campaigners for a reception at the House of Commons recently as part of the No More A14 Delays in Suffolk lobby.

Suffolk Chamber in Bury St Edmunds

 

The following article first appeared in the Suffolk Chamber of Commerce Winter 2019 edition of Chamber Voice. It is reproduced here by kind permission of Suffolk Chamber of Commerce.

Chamber interview: In the latest of a series of Q&As about different parts of the Suffolk Chamber family, we put some key questions to Simon Burton, the new chair of Suffolk Chamber in Bury St Edmunds.

 

Q: What is Suffolk Chamber in Bury St Edmunds’ remit?

Our remit is to support and benefit businesses in our local area in a number of ways, including:

•  Providing networking opportunities and events with interesting speakers on a variety of topics
•  Giving businesses a voice and an ability to share any issues or concerns that are impacting them and then funnelling this into local and national government
•  Supporting and delivering campaigns to improve the business environment and make doing business easier
• Promoting Suffolk and in particular Bury St Edmunds as a viable and attractive business destination
• Providing member benefits and advice through Suffolk Chamber.

Q: What is the role of your board?

As chair my role is varied, but the primary function is to assist with co-ordinating and assisting other board members in delivering our manifesto.

More directly this involves representing the other board members and Suffolk Chamber at meetings and chairing networking and speaker events. In addition, I have the responsibility to shape and steer the board to provide the right expertise and feedback to deliver on our manifesto targets to improve the local environment for business.

Q: How challenging has this remit been to deliver?

There are challenges with such a wide variety of issues, and indeed in a county with such a large geographical spread. That being said, we benefit hugely from the passion of local businesses and how prepared they are to engage and lend their support to our campaigns and events.

Q: What do you hope to achieve during your term as chair?

The main aim has to be making Bury St Edmunds an easier place to both attract and allow businesses to thrive. Other than that, I want to continue to do the good work done before me in creating a strong board from a number of industry backgrounds as well as increasing awareness of the great work that Suffolk Chamber does and the benefits that are available to members.

Q: How has Suffolk Chamber in Bury St Edmunds approached its lobbying campaigns?

Through working closely with local government, utilities providers, major employers and other stakeholders as well as putting on numerous events to both make businesses aware of campaigns and giving them a voice and feeding that message and data back to local and central government.

Q: How does Suffolk Chamber in Bury St Edmunds benefit from being part of Suffolk Chamber?

Being part of Suffolk Chamber has enabled us to concentrate on delivering our aims, with the additional administrative and background support, not to mention delivering excellent events and speakers through a dedicated events team.

Q: What one thing would you like Suffolk Chamber in Bury St Edmunds to do differently or more of?

I would personally like to see an increase in the number of networking events, both formal and informal, and a stronger engagement with smaller businesses.

For more information about Barker Storey Matthews now part of Eddisons in Suffolk, contact Simon Burton,[email protected]

The way we shop is dictating the look and feel of our high streets but while Cambridge remains a destination location for shopping, it’s the independents calling the shots in the city’s secondary locations, as Laurence Gercke, Barker Storey Matthews- now part of Eddisons retail specialist in the city, explains.

The state of independents

Last year (2018) brought an unprecedented wave of store closures, job losses, restructurings and administrations on the UK high street, leaving household brand name retailers battling for survival.

The buoyancy in Cambridge’s retail sector, from a property point of view, is coming from the independents. And it’s those independent traders selling services you can’t buy online who are setting the tone in the city’s secondary shopping locations.

Barbers, tattooists, beauticians and stylists. While you might be able to book appointments with them online and pre-pay online, you can’t have a shave, a sleeve done, a massage or half head of lowlights without actually being there.

The beauty of independents is that the backer of the business is, more often than not, the owner of the business and a worker in the business itself too. Life savings are invested in the business or the family house is mortgaged against it.

Last summer, my colleague in Peterborough, Julian Welch, blogged about the willingness of landlords to consider the value of independent traders now in a way they wouldn’t have done a decade ago – pointing to the rise of the one-off coffee shops, cafés and micro-pubs in Cambridgeshire.

The property stock in Peterborough sees its independents able to trade in the city centre itself. Whereas in Cambridge, the retail property stock in our historic city centre is, generally, beyond the reach of those kind of one-person start-ups and landlords of these properties are realistic when heeding the advice of their agents and advisers about potential occupiers’ covenant strengths.

The entry point of the property market for independent retailers here, in Cambridge, sees them looking to the secondary commercial locations such as Mill Road, Newmarket Road and neighbourhood shopping locations such as Cherry Hinton. A retail instruction we took on at the end of January, for 48 sq m (517 sq ft) premises on Newmarket Road, saw us with five viewings in the first week.

The demand from independent traders is there and so we’re encouraging landlords to bring forward their smaller premises for consideration now.

For more information on retail premises and the retail property scene in Cambridge, contact Laurence Gercke, 01223 467155, [email protected]

Attending to energy performance levels should, by now, be part of modern landlords’ property housekeeping and forward planning, advises Barker Storey Matthews’ now part of Eddisons Martin Hughes.

EPCs: Act, Plan but Don’t Panic

 

It has been well publicised that April sees the start of the new regulatory regime in which it becomes unlawful to let a property not achieving an EPC of at least Band E when it comes energy performance.

Any landlord holding a property with a lease event – whether that be a new one or a renewal – in the offing in the next few years cannot afford to be complacent about the new regime and should act now.

It is not the best practical or financial scenario to wait until a lease event occurs before finding out what, if any, work is required to make the property lawful to lease.

Best advice to landlords who are not in possession of an EPC assessment of their property already is to obtain one. There is no necessity or requirement to formally lodge the certification unless and until the property is marketed for letting. A draft EPC could prove a valuable working tool.

Having knowledge of where the property sits in terms of energy performance will allow a landlord to assess what remedial work is required should the property achieve a rating in Band F or Band G.

Given that tenants may become sensitive to EPC ratings following April 2018, some landlords with properties achieving only the minimum Band E ratings might still judge it worthwhile to undertake or plan for work to improve the energy efficiency further. The motivation for doing this is focused on making a property more marketable or future-proofing their asset in anticipation of any further tightening of the energy requirements in the years to come, with a view to achieving a better rental value at the appropriate time in the life of the lease.

Obviously, the level of work to make any grade above and beyond what makes the property lawful to lease will depend on the landlord’s view of local market conditions at the time the lease is up for renewal or a new lease offered.

Armed with a draft EPC and information about works required on a property, gives a landlord time to build up a fund and plan for the works. The scope of the work to achieve the minimum Band E may not be prohibitive but it is better to be informed than surprised.

Property owners should also be mindful of the resultant EPC when undertaking any refurbishment, as new is not always best when it comes to EPCs. Small variations in the specification can have a huge impact on energy performance without, necessarily, impacting on the budget. Again, therefore, obtaining the right advice as early on in the process as possible can reduce the risk as the project progresses.

It could be the case that it is a tenant’s own fit out that is the cause of a low EPC. This could be something of a minefield when it comes to a lease renewal or dilapidation negotiations.

Works to improve an EPC grade may be extensive and, with a sitting tenant, could well be disruptive. Works may be met with resistance from the tenant if its business or ability to trade were to be adversely affected.

There are exemptions from compliance with the minimum energy efficiency standards (MEES) which include tenant’s refusal to allow landlord access. However, the requirements to meet the exemptions are yet to be tested in law.

A draft EPC will prove a useful tool in a landlord’s financial planning – particularly as lenders are becoming increasingly sensitive to the new EPC regime and a mortgaged property’s place in the band hierarchy.

Property advisors – much like financial advisors – are, in the main, cautious creatures and so our advice to landlords with life left to run in a lease is to be prepared. While it’s more action stations than panic stations, it is best to guard against complacency.

For more information on energy efficiency improvements, please contact our building surveying experts services.

Commercial property occupiers in Peterborough are poised to benefit from business rates exemption but the pressure on supply of stock could see rents rise.

Business Rates: Peterborough businesses benefit from rates relief

 

A recent briefing, by the Centre for Cities, on the impact of the new business rates regime saw Peterborough ranked in the top ten cities for commercial properties and business premises that will benefit from small business rates relief.

The new business rates schedule came into effect on 01 April this year but the revaluation values are based on those of April 2015. Although acknowledged as a growth city and set in a prosperous region of the country, industrial property values in Peterborough are relatively low compared with other UK towns and cities.

This has helped Peterborough in the rating revaluation of its commercial properties as it sees many benefiting from the increase in the small business rates threshold announced by the Chancellor of the Exchequer in his spring budget statement.

In the financial year just ended – 2016/2017 – 33 per cent of Peterborough properties were exempt from business rates but, under the new business rates regime and the increased threshold assistance, exemption will extend to 57 per cent of properties for the financial year 2017/2018.

This is good news for occupiers, in the short term at least. For example, where a tenant occupies one unit in Peterborough with a rateable value of £12,000 there was a business rate charged of around £5,850 per annum up until 31 March 2017; from 01 April there will be no charge under the new arrangements. Considering the rent on the unit might be £11,000 pa, the £5,850 is a significant saving on fixed costs for the business.

However, this silver lining has a cloud looming on the near horizon. For the two years since April 2015, the supply of industrial units in Peterborough in general and, in particular, smaller units in this slice of the market with a rateable value under £12,000 has been diminishing. Indeed, for industrial units under 2,000 sq ft, availability has reduced from 40 units to now only five at the time of writing.

Increased pressure on rents and prices created by the lack of available stock will only intensify as incumbent occupiers start saving on their business rates. As new tenants and occupiers start competing for the few remaining available units in the marketplace, it is highly likely they might be willing to spend some of their new business rates saving on higher rent levels.

It will be interesting to watch how these forces in play out in the coming twelve months but it is not unreasonable to assume that Peterborough might experience some fairly steep rises in prices sooner rather than later, particularly for premises in the industrial property sector.

For more information about business rates and appeals contact Martin Hughes, 01733 556490 , [email protected]  or see https://www.bsm.uk.com/our-services/rating-compulsory-purchase-&-compensation/

Taking a lease on a commercial property, on full repairing terms, without proper advice on the potential implications, can be an expensive experience for those new to business leases. David Park, head of Barker Storey Matthews’ now part of Eddisons Building Surveying department explains more.

Commercial Property – Schedules of Condition

 

Short term leases of 3-5 years are now common, and it is important that any prospective tenant ensures that the obligations they take on are proportionate to the length of the lease. For example, entering a full repairing lease for five years where the roof is in relatively poor condition could result in the tenant being responsible for replacing this if the condition deteriorates to a point where it is beyond economic repair before or at lease expiry.

It is important, therefore, that the repairing and other obligations within the lease are properly considered and, where relevant, defensive measures put in place to protect the tenant’s interests.

Of course, depending on the other terms of the lease, this may be rejected by landlords, especially where rents have been reduced and/or incentives are given in the first place. So tenants also need to be mindful that cheap rents may reflect the increased costs of repair.

A common way of achieving protection is to have a schedule of condition prepared to record the condition of the premises at lease commencement. Typically, this schedule would include photographs and text to ensure that there is an accurate record of the condition at lease commencement. The content of the document is normally agreed between the landlord and tenant, and a copy of this, signed by both parties, is appended to the lease.

It is important that the document is properly prepared, particularly as the relative cost of professional advice is generally insignificant when compared to the potential cost of a substantial dilapidations claim at lease expiry.

We have seen many examples of poorly prepared schedules of condition and these have led to uncertainty, disagreement and unexpected costs at lease expiry. Examples of the problems encountered include:

• Poor quality photographs which do not clearly show the defects that exist
• An insufficient number of photographs, mainly consisting of general views without close-ups of individual defects
• Original digital photographs not being available, with reliance on colour copies of original prints
• Schedule of condition misplaced or lost

We have even had one or two instances where a lease has referred to a schedule of condition, only to find that the Schedule of Condition was never prepared! It is critical, therefore, that the document is properly prepared, the photographs are of good quality, a digital copy of the photographs is available, and that supporting text is provided, cross-referenced to the photographs.

The cost of hiring a mobile platform will add £400-£500 to the overall cost and may seem an unnecessary expense, but this could be a false economy when the potential cost of roof repairs or replacement is taken into account.

While schedules of condition are a useful means of protecting a tenant’s position, they do not remove the obligation to repair and do not necessarily provide the level of protection some tenants expect.

For example, if the schedule records that there is minor wet rot to a door and no attempt is made to maintain the door to prevent further deterioration, such that by lease expiry the door is beyond economic repair and will need to be replaced, it would be the tenant’s responsibility to do this, notwithstanding that this includes an element of improvement.

In most cases, it is just the repairing covenant that is qualified by the schedule of condition, and there is still an obligation to redecorate prior to lease expiry. This matter should be considered and properly addressed when agreeing lease terms, as this can prove costly. Often, the exposed steel frame in industrial buildings remains undecorated for many years, and the cost of redecorating could be significant.

Commercial Property Peterborough – Schedule Ready

We have recently prepared a schedule for a commercial property in Peterborough, an industrial building of just over 100,000 sq.ft., where the decorating covenant was not qualified and the steelwork had not been redecorated for some considerable time. We inspected prior to lease terms being agreed and were, therefore, able to ensure that there was no obligation to redecorate the steel frame at lease expiry.

How can we help?

Obtaining professional advice at an early stage in lease negotiations will give prospective tenants the best opportunity of protecting their position and limiting their potential dilapidations liability at lease expiry. Please contact David Park or Ian Beesley on 01733 233445 should you require assistance.

This week, Cameron Park, based in the Barker Storey Matthews now part of Eddisons Peterborough office, discusses the challenges faced by businesses that are looking to acquire new commercial property.

Barker Storey Matthews now part of Eddisons, Peterborough: The Challenges Faced by Smaller Companies When Acquiring Commercial Property

 

The BBC has recently reported that smaller companies here in the UK are not receiving the funding required to grow to a global size.

Funding has, for some time, been an issue within the UK as many investors look to dispose of their share of a business well before it can grow to the size of a Google or an Uber.

It has been suggested that one of the main reasons for this is that tax breaks available to investors are only a benefit if the investor exits when the company is smaller. Investors are essentially incentivised to exit from an investment earlier than they would do if they were based elsewhere around the globe.

This highlighted to me one of the many challenges that small businesses face in modern times. Acquiring commercial property is another example of these challenges and can be a stressful process throughout. This is especially true in a buoyant market where availability is low and prices and rents are rising.

Inexperience

Many occupiers rely solely on themselves or one of their colleagues/employees to acquire commercial property on behalf of the company. This usually involves someone who has limited experience in identifying the type of property that is required – which can result in a number of issues being missed.

If the wrong type of property is sought then the company could not only acquire a property that does not suit their requirements but they could also be faced with a liability they are unable to dispose of, especially if they pay too much or commit to unattractive lease terms.

Seek Advice

The solution is to take advice from a commercial property professional / chartered surveyors , ideally before the search for a new premises starts. They will be able to advise on the nature of the property that will be most suitable for the business as well as lease terms which reflect a company’s specific operational requirements.

As an example, if the company is growing, flexibility needs to be built into the lease agreement to account for expanding operations and needs.

Other pitfalls associated with occupying commercial property could be missed if advice is not taken on such things as lease break clauses, rent free periods or other inducements, schedules of condition to avoid substantial dilapidations, liabilities at lease expiry, etc. Good advice is never expensive, and the rewards of speaking with a professional prior to this process will far outweigh the expense incurred should your acquisition of property go wrong.

For further advice regarding the acquisition of commercial property, please contact one of the agency teams at any of our four offices (Peterborough, Huntingdon, Cambridge and Bury St. Edmunds).

We are able to advise on all property matters across these locations and the surrounding areas. Alternatively, give us a call here at BSM Peterborough on 01733 897722.