Case Studies 2016-10-25T22:05:20+01:00

Case Studies

1. Retail Landlord

Business Challenges:

  • Our client had a retail property where they wanted to improve the value.
  • The tenant had approached our client with a view to surrendering their lease and had made an offer of £50,000 to terminate their lease.
  • REAS was instructed to act for the Landlord in the lease surrender negotiations.

Our Approach

REAS

  • Inspected the property and compared the lease Schedule of Condition and Trade Inventory to the actual property.
  • Opened negotiations with the tenant based upon our findings. This included investigating the background of the tenant, and their ability to make a payment.
  • Approached the local planning office to establish opportunities to seek a change of use. Our discussions with the local planning authority identified a wider plan to reduce the A1 planning consents in the locality.
  • Made recommendations to the client, as well as opportunities to reduce property holding costs.

The Results

As an outcome of our instruction and approach, we were able to:

  • More than double the surrender premium.
  • Identify items missing from the Trade Inventory and seek recompense for these.
  • Identify short term cost saving opportunities through business rates.
  • Include the ability for the Landlord to recover further sums as part of the surrender.
  • Negotiate an additional payment following our final inspection and based upon items the tenant had failed to comply with.

2. Retail Occupier

Business Challenges:

  • Our client was a new ‘start up’ business and required commercial retail premises to trade from.
  • Our client had identified potential premises. However, they were unsure how to maximise their position to give their new business sufficient flexibility for the short, medium and long term.
  • REAS was instructed to negotiate new commercial lease terms on behalf of the tenant.

Our Approach

  • The REAS approach was to understand our clients’ business and needs before opening negotiations with the Landlord.
  • As a new ‘start up’ business the Company required flexibility and security for their new operation.
  • The lease negotiated ensured the rent was below market rent. Incentives included rent-free periods and ensuring their fit out works were included in the lease documents preventing additional costs.
  • REAS managed the entire process including appointing and liaising with lawyers through to completion.

The Results

The REAS team were able to:

  • Deliver a comprehensive service to our client dealing with all property issues and aligning these with the business needs.
  • Achieved a lease with sufficient flexibility for the short, medium and long term needs of the business.
  • Minimise all costs for the Company whilst also ensuring all future costs were minimised.

3. Timber Manufacturer

Business Challenges:

Our clients’ business had changed significantly over the past 5 years. Their ongoing need for a large manufacturing facility had reduced and the client was keen to explore options to unlock the value.

REAS was instructed to review the manufacturing site and to identify opportunities on a short, medium and long term basis.

Our Approach

The REAS approach consisted of a number of activities which included:

  • Reviewing the business rates liability and seeking opportunities to reduce the costs.
  • A review of the Capital Allowances to ensure all allowances had been claimed.
  • Reviewing the property title to identify potential restrictions or issues that may negatively affect property values for either the existing or any future uses.
  • Reviewing the planning history, local plan policies and consideration of potential alternative uses for the site.

REAS prepared a strategy and recommendations.

The Results

  • An independent assessment of the property to ensure property costs were minimised and value creation maximised.
  • REAS identified significant value creation opportunities including redevelopment opportunities that will significantly enhance property values.

4. Manufacturing Business

Business Challenges:

  • Our client was embarking upon a management buy out and, as part of their diligence exercise, they wanted to understand any constraints or opportunities with the leasehold commercial property.
  • REAS were instructed to undertake a review of the Company’s property holding and report on issues with significant risk and/or significant opportunity.

Our Approach

REAS’s approach consisted of the following:

  • Inspection of the properties.
  • A review of all property documentation.
  • A review of the planning history and current planning policies.
  • Produced market evidence of current rents, together with a summary of current availability within the immediate locality.
  • Prepared a report to summarise our findings including identifying opportunities to reduce costs, increase value and prevent value erosion together with potential risks and opportunities for the Company.

The Results

  • Our findings identified a lack of supply in the local market against rising rents.
  • Redevelopment opportunities for the Landlord were limited, resulting in a greater opportunity for the Company to negotiate revised and new lease terms.

As a result REAS were able to prepare a strategy document to secure the medium/long term future of the Company whilst also providing security for future investment into the business and securing jobs.

5. A large automation business

Business Challenges:

  • Our client had entered into leases of four commercial office buildings in 2002 expiring in 2019. Our client had never occupied the properties and had sublet the accommodation to two different companies on co-terminus terms.
  • The Company wanted to negotiate a surrender of the leases in order to concentrate on their core business.

Our Approach

  • REAS worked as the client’s property advisor to review the leases, planning background, current sub tenants together with a review of each Landlord.
  • REAS was then able to use this knowledge to prepare a detailed strategy to minimise any premium payment.
  • As part of the client’s team we worked with senior management, external lawyers and other professional advisors to link the property strategy with the business needs.

The Results

  • REAS successfully negotiated a surrender of the various leases whilst retaining the existing tenants and identifying development opportunity for the Landlords.
  • REAS was able to make a substantial saving of over £500,000 against the long term hold option.
  • REAS managed the whole process from start to finish ensuring the client could remain focused on their core business.

6. Restaurant Due Diligence

Business Challenges:

  • The client wanted to make a significant investment in a restaurant business with seven sites in the UK. As part of their diligence process they required a review of the seven leasehold properties.
  • REAS’s scope was to review and report on the leases together with their principle terms, whilst also highlighting any areas of risk/opportunity.

Our Approach

  • We worked with our client to understand the current business operation and sought copies of all legal documents available.
  • REAS undertook market research to understand typical lease terms and market rents in the sector.
  • During our review we identified a number of ‘non-standard’ clauses, in particular repairing clauses that were particularly onerous.

The Results

  • Based upon our report, the client deferred any business investment until a later stage to allow the business to meet key milestones.
  • REAS continues to play an active role in monitoring the property performance of the business.