Coke Gearing

PROPERTYMATTERSSECOND EDITION

INSIDE THIS ISSUE:

n THE WORD ON THE STREETWill internet shopping be the death of the High Street?

n PREMISES, PREMISES!The commercial property market shows new promise

n BACK IN OFFICEPre-lets and spec-builds point to office market revival

n SPEEDING THE SALEHow to accelerate the commercial conveyancing process

n RISING FROM THE ASHESFutura Park: a case study in urban regeneration

n A DEAL OF TROUBLEA word of caution on taking out full repairing leases

n IN THE ZONEHarlow enterprise sweeteners for relocating businesses

www.cokegearing.co.uk

Property Matters 12pp Revised KM_Layout 1 28/05/2014 12:26 Page 2

Bishop’s Stortford Retail Commentary

Evolution of the high street - a case study

In truth, the situation, whilst challenging, is far less negative thanperception would suggest. What is actually happening on theground is that high streets are – as they have always done –evolving to meet the particular needs of today’s shopper/retailand leisure customer.

The statistics demonstrate that even over the recent Christmas,internet shopping, whilst rising, accounts for less than 20% oftotal non-food retail spend in the UK.

It is undeniable that the internet will have a significant impactupon certain types of retail business, particularly those wherethe consumer is price sensitive and other forms of technologycan be employed to generate the results: this is particularly truein, for example, the retail book trade and the trade in music.

I fear that we have seen the last of the traditional record storeson the average high street, and retail booksellers are clearlystruggling to compete with the likes of Amazon and Kindle.

This does not mean, however, that retail itself is dead; more thatit is evolving to suit a different style of customer.

At the higher end of the value range, customers are much morelikely to see and try on or test a product, and therefore aphysical high street presence will be required and most retailersare evolving a “bricks and clicks” strategy which involves highstreet presence combined with internet accessibility and a homedelivery network.

The effect of this in real terms is to reduce the overall level of demandwithin the high street, but paradoxically to free up the customer interms of time so that there is more time available for browsing andcomparison retail, whether the object is bought via the retailer or viaan internet site.

Those retailers who are adapting well to this climate include theobvious discount brands such as Lidl, Aldi and the pound shops, andthe more upmarket brands trading on quality and personal service. It is, unfortunately, the mid-market sector which is most likely to feelthe pinch.

High streets have always evolved, from the days when our forebearsopened shops in their front living rooms, to the days of mass marketsuperstores on the edges of towns, and the raft of new “chain” retailerswhich expanded aggressively in the latter half of the 20th century,including such notable retailers as Burtons Tailors, Stead & SimpsonShoes and the like, names which are rapidly disappearing from the high

Much has been made in recent years of the “death” of our high streets, and in particular those ofmarket towns such as Bishop’s Stortford. There has been considerable, possibly ill-informed,comment in both the national and local press in relation to the impact of the internet, and manypredictions have been voiced suggesting that the high street is dying and that we will effectivelyreduce our town centres to ghost towns.

“ I fear that we have seen the last of thetraditional record stores on the average highstreet, and retail booksellers are clearlystruggling to compete with the likes ofAmazon and Kindle.”


Richard Coke [email protected]

street but which have evolved, through groups such as Arcadia, intodifferent business models.

A good case in point is the development of the former Pearsonsdepartment store at 15/17 North Street, Bishop’s Stortford, whichdemonstrates both the enduring strength of a good town centrelocation and the evolving nature of the retail sector.

Originally constructed in the mid-17th century as a pair of merchants’houses, the North Street premises have undergone a number ofevolutions, being the original home of Sworders Auction House andmore recently becoming a department store, ultimately occupied byPearsons of Enfield.

To cope with rising demand, and in order to accommodate a widerrange of goods, the original buildings were extended over time and atvarious different levels and in various different building styles to extendfrom the North Street frontage through to the Basbow Lane frontageat the rear.

At the end of this phase of development the buildings comprised over30,000 sq ft gross of retail spread over five trading floors andconnected by a myriad of staircases, corridors and lifts.

Due to the competitive pressures which we have alluded to above, thebusiness model, and the building itself, began to creak under the strain.

What ultimately drives the success of any retail operation is itscustomers, and it became apparent over the last decade or so thatcustomers were increasingly unwilling to seek out the men’sdepartment on the second floor, for example, or to call in and browsethrough multi-level departments connected in a somewhat haphazardfashion.

The modern retail customer requires a warm and pleasantenvironment that is well lit, has an obvious connectivity betweendepartments and, most importantly, affords ease of access.

From a retailer’s perspective, occupying a multi-level building with smallfloor plates in each department becomes extremely uneconomical,given that it requires staff and tills at every level. Moving merchandisearound the store and loading and unloading become a seriouschallenge, and keeping enough stock available to satisfy the wide rangeof customer requirements becomes a logistical and storage nightmare.

It is true to say that, at the end of its life, the only department withinthe department store format that was actually making money was thecosmetics department, largely thanks to absence of any competitionin the immediate marketplace.

The site was acquired by developer clients in 2011 following theclosure of the Pearsons store.

The developer acquired a mixed site comprising two listed buildingson the North Street frontage, a complete rabbit warren of variouslater extensions from the Victorian era through to the 1980s, and arelatively modern building at the rear. The whole was spread over asite which linked North Street and Basbow Lane, but the leveldifference between the Basbow Lane frontage and the North Streetfrontage was some five metres.

This presented a number of challenges. After extensive consultationwith the Local Authority and the Listed Buildings Officers, it was agreedthat the adage “less is more” should be applied to this property. As aconsequence, consent has been obtained for the demolition of a large

part of the ‘modern’ additions to the premises, reverting the site toclose to its original configuration with the two substantial town houseunits on the front being retained and the remainder of the site beingcleared with a new residential development being constructed andaccessed separately from Basbow Lane to the rear.

This has enabled the buildings of architectural merit on the frontageto be retained, and they are in the process of being completelyrefurbished.

Both units have been let to high quality restaurant/delicatessenoperators who have been prepared to commit to new 20-year leases,showing much confidence in their business models and the locationwithin the town. It is sad, but interesting, to note that the total netretail floor area will have been reduced from circa 25,000 sq ft to circa8,000 sq ft in the process.

The acceptance of these uses was a departure for the Local Authoritywho previously had North Street designated as a prime retail locationwith uses reserved for A1 retail occupiers. It is clear, however, that theessence of North Street has changed radically in the last ten years andthat it has become a service- and leisure-related destination.

The presence of two high street names within the façade will bring lifeback to this stretch of the town and generate additional footfall forretailers in the immediate vicinity and, more importantly, provide afurther reason for shoppers to actually come to Bishop’s Stortford.

In essence, this encapsulates the evolution of the high street, as large,outdated and economically unviable units are refurbished and probablyreduced in size to provide accommodation which is required by today’sretailers and restaurateurs.

The net benefit, however, is that the developer, the occupiers and thetown will achieve an economic boost and an existing and somewhatsorry-looking building will be rejuvenated, once again proving that thereis life and retail demand for appropriately sized units in strong markettowns such as Bishop’s Stortford. The developer client will not onlyreceive a commercial return, but also the satisfaction of improving thestreetscape and vitality of this important local thoroughfare.

The moral of this tale, therefore, is that the high street is not dead, itis merely evolving into a more leisure- and recreation-oriented modelthan we have seen hitherto.


“The net benefit, however, is that thedeveloper, the occupiers and the town willachieve an economic boost and an existingand somewhat sorry-looking building will berejuvenated.”


Bishop’s Stortford Commercial Commentary www.cokegearing.co.uk

The market turns… will development follow?We have all heard how the economy has hopefully now turned a corner and that the couple offalse starts experienced over the last two years will now be followed by a more permanent andsustained recovery. We all know that the residential market is hotting up, but what does thismean for the region’s commercial property market?

The M11 corridor is best known, not for its office market, butas a regional hub for hi-tech manufacturing and distribution, soit naturally follows that this market should be the first to showany signs of improvement. This has certainly been the case as thelatter part of 2013 saw a significant upturn in the quality – if notthe quantity – of demand. Real companies, with realrequirements – that’s what generates market stimulus.

The main issue facing occupiers now, though, is the lack of goodquality product that they can readily move into. Traditionally,industrial occupiers have been able to pick from a variety of unitsthat were up and built and “oven ready”. However, the almosttotal absence of any new-build stock over the last five years hasled to a dramatic shortage of quality buildings available in theregion.

Yes, there are a few older units dotted about, but if companieswant better quality buildings offering a higher standard ofworking environment for their staff, lower energy costs (a realboon in today’s green world) and the improved efficiency ofaccommodation that a new building can offer, what are thechoices? In a “normal market” any areas well serviced bymotorways, airports and trains would be a natural choice forspeculative development.

The “build it and they will come” mentality was seemingly theonly way for development to occur and occupiers got used toit. Therefore the majority have never understood the “off-plan”deal, and whilst the last period has offered this opportunity insome locations, the maths generally only worked on buildingsover 20,000 sq ft and for 15-year-plus lease commitments. Manyoccupiers simply could not or would not commit to thoseterms.

We are now at a point in the cycle where we have burgeoningdemand with little or no quality stock. Does this mean thatdevelopers are going to throw caution to the wind and put aspade in the ground speculatively? In certain key location areasthe answer has to be yes. The availability of development financeis starting to improve, but much like residential mortgages thedue diligence is greater; the caution is there, so the likelihood isthat we will see a return of speculation, but only with developerswith a substantial track record and in the most robust locations.This added caution will lead to a more sustainable approach andhopefully one where supply matches demand but no more.

2014 will yield a return to more normal market dynamics. A gentle upturn in demand will allow developers once again to look atproviding much-needed speculative stock to a market starved of goodquality buildings. Watch this space…

Ivan Scott BSc [email protected]

“The “build it and they will come”mentality was seemingly the only wayfor development to occur and occupiersgot used to it.”

Building Two, Marriott Court, London Road, Bishop’s Stortford

To LetBrand new Grade A suites from 5,760 sq ft to 25,000 sq ft with

60 car parking spaces. Attractive riverside setting on edge of town, just five minutes’ walk from mainline station, with good access to

M11, A120 and M25.

Unit 38 Raynham Road Industrial Estate, Bishop’s Stortford

To Let3,869 sq ft modern warehouse/industrial unit with nine allocated car

parking spaces. Close to M11 Junction 8


Grab the last before they’re past!

New, high quality units available from 1,216 sq ft (113 sq m) to 4,882 sq ft (454 sq m)

Quality spec-built offices like this are few and far between, and this is a rare opportunity to acquirethe freehold on the last remaining units in thisprime location - strategically placed for the M11and Stansted Airport.

• Comfort cooling/carpet throughout/raised floors• Private car parking• Leasehold/Freehold • Suspended ceilings with integral lighting

www.M11businesslink.com

Louise [email protected] [email protected]

MATTHEWSBen [email protected] [email protected]

BUSINESS LINKSTANSTED


“Enquiries are up, speculative development isnow happening again, pre-let deals are beingagreed and secondary stock is being traded dueto the lack of supply of Grade A space”

Top Floor, Marriott Court, 95 London Road

To Let650 sq ft to 10,000 sq ft business units available in excellent location for A120, M11 and Airport.

Peek Business Centre, Bishop’s Stortford

Bishop’s Stortford Office Commentary www.cokegearing.co.uk

Green shoots emerging slowly in the office marketAcross the board there have been noticeable signs of improvement in the office market andsentiment has changed significantly from 12 months ago. The UK economy has shown robustgrowth, and business confidence has begun to feed through into demand for office space and signsof improvement in the office investment market.

My view is that the main factor impeding the occupier marketis the falling availability of Grade A space, with developersremaining wary of carrying out speculative development despiteoccupier confidence improving, along with a significant increasein enquiries from SMEs and larger occupiers. However, thereare signs that the pre-let market is returning once again.

Overall supply levels, however, remain high, and this is due tothe availability of second hand stock. With the lack of newspeculative development space entering the market, and GradeA space dwindling, occupiers – and even investors – are fallingback on good quality, second hand stock which has, in turn,pushed rents up due to greater competition for this space. Thishas meant that lease incentives are beginning to shorten, leadingto net effective growth in prime rents.

The weight of money and lack of supply has meant that yieldson prime office stock have hardened. The overall brighteningUK economic sentiment has meant that investor appetite forwell-located, shorter income stock in the regional market hasincreased and good secondary stock is indeed sought after byinvestors who seek “added value” opportunities. UK buyerssuch as Aviva and Threadneedle have experienced particularincreases in purchasing activity over the last six to twelvemonths.

Prime rents in Bishop’s Stortford are headlining at £21.00 persq ft with Chelmsford headline rents being £23.50 per sq ft andtypical rent free on a ten-year lease term is 24 months. Goodquality secondary rents are achieving circa £16.50 per sq ft inBishop’s Stortford and secondary rural stock is achieving circa£12.00 per sq ft.

From a development point of view, the office to residentialpermitted development scheme has meant that a number ofoffices have been sold for development to residential, whichproduces notably higher values. This has helped in reducing theamount of vacant office stock that has been sitting doingnothing for months, if not years, and utilising it to its bestadvantage.

Vacant office space can be fairly costly for landlords, andtherefore a number of them have, in order to avoid the impactand build-up of empty rates and other holding costs, agreed toincentivised deals with tenants so that they at least have costscovered, even if they are not benefiting from the letting untilthe first year has expired, or indeed even longer.

In conclusion, it would be fair to say that overall the officemarket is seeing “green shoots”, albeit being the slowest sectorto do so. Enquiries are up, speculative development is nowhappening again, pre-let deals are being agreed and secondarystock is being traded due to the lack of supply of Grade A space,with increase in demand being at its highest level since 2008.

Louise Campbell [email protected]

To LetBrand new Grade A suite of 4,820 sq ft NIA in an attractive riverside

setting with views over Bishop’s Stortford. Ten allocated parking spaces.


TriSail

Your new corporate address

Water Circle, Elsenham Meadows

London StanstedCompletion mid 2015

TriSail Towers, inspired by billowing sails, offers stunning iconic design and a new Financial and Commercial Centre/District for London Stansted comprising Corporate Office and Executive Suites, Spa, Salon, Fitness Centre and Café/Restaurant Bar.

Having the energy to become an ‘iconic International destination’ and attract and command attention and Investment from World Class Clients, TriSail is attracting financial corporate companies both regional, national and international.

www.trisailtowers.com

Unparalleled Direct Access to London Stansted International Airport, a major core commuter transport hub and M11 growth corridor.

5 minutes to the London Stansted Airport Terminal - International, European and Domestic destinations.

5 minutes to Harrods private jet terminal for corporate jet facilities and helicopter charters - 15 minutes to Central London

5 minutes to two National Rail high speed Stations – Airport ‘Stansted Express’ and Elsenham – Eastern / London – 30 minutes Liverpool Street / London

5 minutes to M11 Motorway – 30 minutes to Canary Wharf, proposed new Link Road A120 /M11 to TriSail Towers (in planning)

Corporate Shuttle Bus to London Stansted Airport

‘A New City Centre’ with unparalleled transport links

For information regarding Exclusive Access Retail please contact:

Tom [email protected] +44 (0)207 152 5778

CokeGearingconsulting

Richard Coke [email protected] +44 (0)1279 758 758

Michael [email protected] +44 (0)1279 816 789

Stuart Austin [email protected] +44 (0)203 147 1112

Cheergrey Properties

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Preparing property for sale

One of the major concerns from clients is the slowness of theconveyancing process. Some delays are outside the control ofthe seller or the buyer and their respective solicitors, e.g. howlong local authorities take to turn around local searches or theissue of finance offers by lenders.

However, there are quite a few things sellers can do to speedup the process:

Instruct your solicitor earlyPossibly through fear of running up a large bill with nothing toshow for it if a sale does not materialise, often the first wesolicitors hear of a transaction is when we receive the heads ofterms from the selling or letting agent.

However, there are advantages to instructing us at the same timeas, or even before, the property is formally marketed. If this isdone:

The title deeds can be examinedIt can be seen that you have title to the whole of the propertybeing sold. If the title is a complex unregistered one it may beadvantageous to register the title at the Land Registry.

If selling an investment property it will be necessary to ensure

that all the original leases and ancillary documents are to hand.

Replies to enquiries can be preparedThese days most commercial transactions involve the seller orlandlord supplying to the buyer or tenant replies to a number of setenquiries known as CPSEs (Commercial Property Standard Enquiries).

These are a set of enquiries designed for use in the majority oftransactions and replace the myriads of forms of enquiries individualsolicitors used.

There are four types of enquiries:

• CPSE1 is for use with all transactions• CPSE2 is for tenanted properties• CPSE3 is for the grant of a new lease • CPSE4 is for assignment of a lease

These cover a number of matters on which buyers or tenants willneed to be satisfied, e.g. VAT, planning, disputes and, depending on thenature of the transaction, insurance and service charges, constructionwarranties, etc. The forms are quite extensive. CPSE1 runs to 34 pageswith 32 questions; most have sub questions. If the matter is anythingother than straightforward, quite extensive research is needed toanswer them fully.

Clients often comment about the perceived length of time the legal side ofbuying and selling commercial property takes. In this article Michael Talbot,Head of Commercial Property at Nockolds Solicitors of Bishop’s Stortfordand New Broad Street, London, explains how clients can help themselves.

By Michael Talbot - Head of Commercial Property at Nockolds Solicitors

Guest Article



VAT issues can be identifiedVAT on commercial property is a minefield. Getting it wrong is costly,especially with the 20% rate making it a large element of the sale price.It needs to be considered if you have opted to tax, or, if not, whetheryou should do so for this transaction. Recently I had a matter where itwas necessary for the seller to revoke its election it made 20 years ago.If you have opted to tax, the buyer may well ask for evidence of this. Itis surprising how few sellers have this evidence, even if they have beencharging VAT on rents to tenants. Enquiries of the national VAT optionunit can be made but these take a couple of weeks to be respondedto.

Contamination issuesGenerally speaking the rule is that the polluter pays. The EnvironmentalProtection Act 1990 contains complex provisions for allocatingresponsibility for pollution. Usually the polluter pays for anyremediation of contaminated land and any damage caused to thirdparties arising from that contamination. If the polluter cannot be found,the buck stops with the current landowner.

Thus, whilst selling a contaminated site can make the buyer responsiblefor clean-up costs, that, in itself, does not pass on the seller’sresponsibility and could come back and haunt the seller later. However,it is possible by selling the property “with information” to pass on anyliability for clean-up costs to the buyer in such a way that the seller nolonger has any such liability once they sell the property.

To take advantage of this clause the following conditions must besatisfied:

• The seller, landlord, buyer or tenant must be the person who caused or knowingly permitted the contamination

• The transaction is at arm’s length

• Before the transaction became binding the buyer or tenant had information that meant it could assess the contamination

• The seller or the landlord does not retain any interest in or rights to occupy the land.

Many solicitors include a generic clause seeking to incorporate suchtransfer of liability. Whilst it is not essential to list any documents reliedon showing the buyer or tenant had the relevant information, theefficacy of such a clause where nothing has been provided is verydoubtful.

If you have a contaminated site a report should be obtained from areputable environmental consultant. Although, as said, it is not essentialto list the report in the contract, it may be wise to do so. A well-advisedbuyer may seek a reliance letter or collateral warranty from theconsultant, and the terms of his or her engagement should provide forthis to be forthcoming if required.

For further information on buying andselling commercial property please contact

Michael TalbotHead of Commercial Property at Nockolds Solicitors on

01279 712595 or email [email protected]

For SaleFine historic property suitable for a range of

retail, office or other uses (STP).

8, 10 & 12 High Street, Bishop’s Stortford

To LetFitted restaurant premises.

Double height, open plan on prime riverside site.

Block C1, 4 Adderley Road, Bishop’s Stortford

To Let3,499 sq ft prominent retail unit. Excellent passing trade/corner position.

Double height ideal for full mezzanine now with A3 consent.

B01/2 Riverside, Bishop’s Stortford


Futura Park Ipswich

Futura Park, IpswichFor the last four years or so, Coke Gearing has been involved in an interestingdevelopment opportunity in Ipswich.The site originally comprised approximately 45 acresof land and 500,000 sq ft of substantial industrial (B2) buildings utilised as a metal smeltingfoundry from about 1910 onwards.

Due to the nature of the use and the age of the buildings, thesite had a number of serious contamination issues whichrequired an extensive programme of demolition andremediation in order to bring the land forward for development.

The economic circumstances of the last recession effectivelycreated a negative site value for the land in relation to itsdesignated use as a strategic employment site, after the costs ofdemolition, remediation and servicing were taken into account.

By negotiation with the Local Authority our clients were ableto persuade Ipswich Borough Council to accept a planning briefnegotiated through the emerging Local Plan, that effectivelyallowed an element of higher value retail development to takeplace provided that this was carried out as enabling work limitedto paying for the costs of demolition and remediation and todelivering a clean and serviced plot for employment purposes.

This involved agreeing the scope of retail impact on the towncentre, a range of users and the size limitations and parameterswhich would comply with the objectives of limiting damage tothe viability of the existing town.

Following agreement on the broad parameters, we were able tointroduce the John Lewis Partnership, who subsequently agreedto take a new lease on a combined John Lewis at Home andWaitrose store, the first time this combination had been puttogether in isolation.

The Local Authority fully co-operated with the planning process,deciding the subsequent application in a minimum period of eightweeks. Construction commenced immediately on receipt ofplanning, and the new store opened its doors in November 2012,less than 12 months from planning consent. A second phase of bulkygoods A1 units was also included in the initial application, and,following the successful opening of the John Lewis Partnership storesand phase one remediation works, we began to identify occupiers.

Pre-lets were agreed with six leading retail names (including OakFurniture Land, Paul Simon, Furniture Village and DFS), followingwhich a new detailed planning application for this phase wassubmitted by our clients.

Again this was processed very efficiently by the Ipswich Planners,resulting in a start on site in February 2013 and completion of thenew retail terrace by August of that year, which is now open andtrading.

“This enabled completion of the 24-month contract to clean and remediate theremaining site and to allow 25 acres of topquality employment land to be broughtforward in early 2014.”


www.futura-park.com

This enabled completion of the 24-month contract to clean andremediate the remaining site and to allow 25 acres of top qualityemployment land to be brought forward in early 2014.

This is a clear demonstration of how economic reality can focusthe minds of planning authorities and developers and lead by mutualco-operation to the adoption of a realistic solution to an intractableproblem, which, due to the age and previous use of the property,could have effectively sterilised the site for many years to come.

By introducing a relatively small element of higher value uses, theLocal Authority has been able to achieve its desired result, which isa deliverable strategic employment site located just off the A14 onthe eastern approaches to Ipswich.

Similarly, John Lewis and Waitrose had been looking to locate toIpswich for many years, and since the store opened it has, we areadvised, exceeded all trading expectations. This is clearly a ‘win win’situation, generating value for the original landowner, developmentprofit for the developer and an opportunity to provide good qualityremediated land from an otherwise brownfield contaminated site,thus relieving pressure on greenfield sites in the vicinity.

The fact that this was able to be delivered against the difficulties ofa major property recession demonstrates how creative thinkingcan be applied to an existing site, and that co-operation betweenlandowners and the local authority can deliver positive results forboth parties.

For further information, or tomake enquiries regardingavailability, please contact

Richard Coke [email protected]


Stansted Airport Commercial Commentary

Adam Tindall [email protected]

Time flies!Stansted Airport has now been under its new MAGownership for a year. MAG purchased Stansted to add toand complement their expanding airport portfolio ofBournemouth, East Midlands and Manchester.

another London hub for cargo we would see a sharp increase incommercial activity which would be more beneficial for localbusinesses, employment opportunities and development of thearea.

We are already seeing the effects of increased activity, with newcontracts being awarded, the newest being the letting of a 12,000sq ft warehouse to SLi Logistics, a Colchester based firm lookingto increase their air freight international operations at Stansted.

The Airport is not short of land for development, with a totalsite area of 600 acres of which 100 acres is capable ofcommercial development in the immediate future, some of whichalready has outline and detailed planning consent ready for whenthe commercial demand increases.

Specifically Coke Gearing is instructed on 17 acres of consentedland on the south side of the Airport for B1-B8 commercial useswhere we can offer bespoke design-and-build packages to airrelated occupiers. In addition there is a 30 acre site on the northside, providing future opportunity for a mix of operational andnon air related users offering design-and-build leaseholdpackages. On the north-east side there is a consented modernoffice park scheme, TriSail Towers, which has begun constructionand consists of 70,000 sq ft of modern office space over threebuildings, creating a new business centre for the Stansted areawhich will aim to attract European as well as UK occupiers.

In short these are exciting times for the area, and hopefully inthe near future we will see the benefits from the rising economyand increased activity at the Airport.

They have been working hard to increase passenger numbersand are currently running at 17.5 million passengers per annum,which is still some way off the peak figures of 2007 whennumbers hit 24 million, but a deal has been agreed with Ryanairto increase routes and numbers as well as encouraging otherairlines to expand.

The terminal building is undergoing refurbishment andremodelling by relocation of security to the side of the terminalbuilding running from front to rear, freeing up considerably morespace to create further airside retail units which will leadapproximately to a 70% increase to the existing facilities.

Airport facts: • 17.5 million passengers per annum

• UK’s fourth and London’s third largest airport

• Extensive network with 150+ destinations

• Affluent catchment with great surface access from centralLondon and the South East of England

• Largest number of connections to Europe in the world

• Potential capacity of 35 million passengers per annum

Increased passenger numbers are beneficial for the Airport, andto some extent for the local area, with more employmentopportunities at the Airport. However, for local Bishop’sStortford businesses and other surrounding towns, increasedpassenger numbers add little to increased business, with themajority of passengers only going directly to the Airport and thevast majority not venturing into nearby areas.

Going forward, MAG are hoping to attract the long-haul carriersto the Airport: in turn this would increase catering, servicing andmaintenance and cargo industries. Should Stansted become

“The Airport is not short of land fordevelopment, with a total site area of600 acres of which 100 acres iscapable of commercial development”


All enquiries:

ENTERPRISE HOUSE

Flexible officespace to letfor 2 – 100people.

Offices available from 200 – 7,800 sq ft

Air conditioning, raised floors and suspended ceilings

Located next to the terminal, with stunning airside views

Fully glazed atrium reception, with coffee shop

Extensive on-site retail and leisure amenities

Ideally connected to the region and London via M11 and Stansted Express

If you’re looking for quality, cost-effective and well-connected office space, choose Enterprise House at London Stansted Airport.

Located in the heart of the London-Cambridge corridor, Enterprise House provides fully refurbished offices with a range of benefits, including:

0800 8499 747 | magproperty.co.uk


Dilapidations:Tenants beware!

Guest Article

What are dilapidations?Most commercial leases contain obligations or “covenants” thatrequire a tenant to undertake certain works to a property eitherduring the lease term or upon expiry. Failure to undertake suchwork leads to a breach of those obligations. These breaches areknown as “dilapidations” and may give rise to a landlord formallyserving a Schedule of Dilapidations on a tenant that will illustratethe breaches and the remedies required.

All leases are different. However, the following are examples oftypical tenants’ obligations:

• To keep the demised premises in good and substantial repair and condition.

• To decorate the interior every five years and during the last three months of the term with two coats of good quality paint.

• To decorate the exterior every three years and during the last three months of the term with two coats of good quality paint.

• To comply with any Acts of Parliament.

• To remove all tenant’s fixtures and fittings at the end of the term and reinstate tenant’s alterations.

• To reimburse the landlord for surveyor’s and solicitor’s fees for preparing and serving a Schedule of Dilapidations.

A landlord can serve three types of schedule:

• Interim Schedule of Dilapidations

• Terminal Schedule of Dilapidations

• Final Schedule of Dilapidations

An Interim Schedule of Dilapidations can be served at any timeduring the lease term. In practice, a landlord would normally onlyserve an Interim Schedule of Dilapidations if the property hasfallen into a state of significant disrepair and failure to act soonwould result in further deterioration.

A Terminal Schedule of Dilapidations can be served during thelast three years of the lease term, although it is usually servedduring the last six to twelve months.

A Final Schedule of Dilapidations is served after a lease hasexpired when the tenant no longer has possession of thedemised premises and the only remedy is a financial settlement.

If the property is new or recently refurbished at leasecommencement and the tenant maintains the structure, fabricand building engineering services during the lease, then there areusually not too many surprises at lease expiry. However,problems tend to arise when a tenant signs a full repairing andinsuring (FRI) lease on a property that is not in good condition atlease commencement.

Pre-acquisition/due diligenceIt is essential that a prospective tenant commissions a Pre-acquisitionBuilding Condition Survey prior to acquiring a commercial propertyas part of their due diligence. Many tenants will not want to incurthis cost unless they are acquiring the freehold interest. However,leasehold interests can still mean taking on substantial repairingliabilities which need to be understood prior to signing the lease.

The Pre-acquisition Building Condition Survey Report shouldsummarise the tenant’s repairing liabilities and include an OutlineSchedule of Dilapidations, complete with indicative budget costs, toillustrate the works that are required to put the building into goodand substantial repair and condition, i.e., suitable for entering intoan FRI lease.

Once the scope of any items of disrepair is identified the tenantgenerally has three options:-

1. Ask the landlord to undertake the works.

2. Agree a rent free period and the tenant undertakes the works.

3. Cap the tenant’s repairing liability by way of a Schedule of Condition (SoC).

Common pitfallsIf the property has been put into an FRI condition, either by thelandlord or the tenant, then there are not usually too manysurprises. However, the following are common pitfalls that wefrequently see when advising tenants who have been served aTerminal Schedule of Dilapidations on a commercial property thatwas not put into an FRI condition and a SoC was annexed to thelease:

1. The repairing covenant of the lease refers to the SoC, but thereis a separate redecorating covenant that is not cross referenced tothe SoC. Therefore, the tenant is required to fully redecorate theproperty and would therefore be improving the condition.

2. The repairing covenant states that the tenant shall not hand theproperty back in any worse condition than as evidenced in the SoC.After a period of occupation, a property is bound to be in a worsecondition and it is impossible to partially repair something and handit back in a slightly better but still dilapidated condition. This thenleads to an argument over “fair wear and tear”. A more “tenant-friendly” wording is that the tenant is not required to hand theproperty back in any better condition than as evidenced in the SoC.

3. The tenant is requested to reinstate alterations undertaken by aprevious tenant, or to remove fixtures and fittings installed by aprevious tenant. The lease should clearly define landlord’s andtenant’s fixtures and fittings and include an accurate lease planillustrating the current layout of the demised premises, includinginternal partitions.

Renting older commercial property on a traditional full repairing and insuring lease can leadto tenants taking on substantial obligations to repair and redecorate a property and lead to ashock at lease expiry. In this article, Stuart Roberts, Director at iCON Building Consultancy inBishop’s Stortford, explains some of the common pitfalls and how tenants can mitigate risk.

By Stuart Roberts – Director at iCON Building Consultancy



Items of disrepair frequently overlookedOlder buildings can suffer from extensive disrepair if poorly maintained.The two items that often appear in dilapidations schedules relating toindustrial properties are as follows:

• Cut edge corrosion of profiled metal roof cladding

• Ultra violet degradation of GRP rooflights

Cut edge corrosion is a common defect that can be expensive to rectifyand is often overlooked. It is therefore essential that a detailed roofinspection is undertaken which may require the hire of a “cherrypicker”.

Ultra violet degradation of GRP rooflights leads to poor lighttransmission, and many landlords claim for new rooflights even whenthe rooflights are not actually leaking. In the recent case of TwinmarHoldings Ltd v Klarius UK Ltd (2013), the Court held the tenant liableto replace degraded rooflights as poor light transmission meant thatthe rooflights were no longer functioning as a rooflight and weretherefore considered to be in disrepair and defective.

Statutory cap on damagesTenants must be aware that a landlord’s claim for damages forbreaches of repairing covenants is capped by Section 18(i) of theLandlord and Tenant Act 1927. This very important piece of legislationprotects tenants from aggressive landlords who try to profit fromdilapidations claims in that the value of the claim must not exceedthe actual loss suffered by the landlord, i.e., the amount by which thelandlord’s interest in the premises has been diminished by thedisrepair. In addition, if the landlord intends to redevelop the site, orundertake such major refurbishment works that would render anyrepairs undertaken by the tenant valueless, then there can be nodilapidations claim, or the claim is significantly diminished.

ConclusionTo conclude, tenants need to commission a Pre-acquisition BuildingCondition Survey Report before acquiring commercial property ona leasehold basis and understand the repairing obligations. Wherepossible and commercially viable, the property should be put into anFRI condition. However, when a SoC is the only commercially viableway forward, the tenant needs to ensure that they are not responsiblefor rectifying existing defects, they are not required to hand theproperty back in a better condition, particularly the decorativecondition, and they are not required to reinstate previous tenants’alterations.

For further information on dilapidations,building surveying and projectmanagement please contact

Stuart Roberts MRICS

Director at iCON Building Consultancy

Tel: 01279 653386Email: [email protected]: www.iconbc.co.uk

n FIGURE 1 – CUT EDGE CORROSION

n FIGURE 2 – ROOFLIGHT SUFFERING FROM UV DEGRADATION

• Asbestos Management Surveys

• Budget Cost Estimates

• Building Pathology and Defect Diagnosis

• CDM Co-ordination

• Contract Administration

• Cost Management

• Development Monitoring

• Dilapidations Advice

• Disabled Access Consultancy

• Employer’s Agent

• Expert Witness

• Facilities Management

• Feasibility Studies

• Fire Risk Assessments

• Interior Design

• Landlord’s Licence Approval

• Land Registry Lease Plans

• Maintenance Appraisal Plans

• Measured Surveys

• Party Wall Surveying

• Pre-acquisition Building Condition Surveys and Due Diligence

• Project Management

• Reinstatement Cost Assessments for Insurance Purposes

• Schedules of Condition

• Space Planning and Architectural Design Specification Writing

We offer the full range of professional buildingconsultancy services, including the following:


Harlow Commercial Commentary www.cokegearing.co.uk

Harlow Enterprise Zones take shapeLike many “new towns” Harlow is championing its new Enterprise Zone. The Council has madesignificant strides over the last 12 months to promote two significant tranches of land which it ispromoting for hi-tech manufacturing, industrial and science based uses.

has now been received for a new link road from Riverway onto theA414 Cambridge Road which will link directly to a new proposedJunction (7a) of the M11. Construction of this new access isexpected to begin in mid 2014. The Local Authority is keen to seea move away from traditional storage and distribution uses in orderto create a more “business park” style environment.

The aim with both of these sites is clear: to place Harlow as a centreof excellence for hi-tech engineering, science and associated uses,tapping into the labour pool along the M11 corridor spilling overfrom Cambridge, and offer an affordable and well-located strategiclocation for large-scale occupiers. The London Road site is withineasy reach of Junction 7 of the M11 and is therefore the betterpositioned of the two currently as far as motorway access isconcerned. Once the new access is created at Templefields East, thiswill certainly add to its appeal as a destination location for thesetypes of operation. It will be interesting to see how these areas takeshape over the next five years, led by the ambitious infrastructureplans due in the next 18 months.

The concept is to boost the local economy by offeringinducements to existing occupiers and to entice new majoremployers to the region. Its promotion will act as a welcomeboost to Harlow’s commercial property market which has seenlittle in the way of new development since 2008.

The two identified sites are located on London Road at theformer Nortel Campus and at The Templefields Industrial Estateoff Edinburgh Way.

The London Road site, which extends to approximately 56 acres(23 hectares), is divided into two areas, north and south.

The southern area, which comprises a large group of formerNortel buildings, is to be refurbished to offer up to 200,000 sqft of office, R&D and data centre space.

The northern area, which is currently undeveloped and occupiedby a sports club, is being enabled to offer a diverse range of sizesfrom incubator-style starter buildings through to large-scalescience based complexes.

The second Enterprise Zone area is known as Templefields East,situated to the north of Edinburgh Way. This is currently a largeindustrial estate comprising a range of predominantly industrialbuildings dating from the 1950s to the present day. This area islikely to involve the redevelopment of some of the olderobsolete industrial stock which will be replaced to a similar sizeand scale by hi-tech manufacturing and R&D facilities. Funding



• Freehold or Leasehold Design & Build packages

• 10,000 sqft to 100,000 sqft space - Warehouse/Industrial/Offi ces

• Land Sales

• Planning obtained to enable swift delivery to occupier

• Flexibility, on budget & on time

Opportunities for Office | Industrial | Roadside or Trade Counter | Warehousing

Next generation high quality business park

NOW

AVAILABLE1.25 to 25 acres of Employment

Land

www.futura-park.com

a development by

[email protected] [email protected]


To Let/For SaleDesign and Build opportunity for warehouse/industrial space

230,690 sq ft (21,432 sq m) on approximately 6.49 ha (16.15 acres).

Stansted 600, Taylors End, Stansted

To Let16,197 sq ft (1,505 sq m) cargo transit shed with airside access

with landside and airside forecourts.

Unit C2, Stansted Cargo Area, Stansted Airport

Sites sold for

redevelopment

MOREREQUIRED

SOLD

SOLD

SOLD


2013 Highlights www.cokegearing.co.uk

Office pre-let agreed with high profile local professional practice.

Investment sold on behalf of developer clients to pension fund investor.

Bishop’s Stortford

Companies we have worked with:

Futura Park, Ipswich

Bishop’s Stortford

Hertford Brewery

Former South Street Commercial Centre sold toChurchill Retirement Living for development into

retirement homes with additional retail.

Development site sold, subject to planning, on behalf of J Sainsbury plc.

n AquiGen Real Estate Solutionsn Associated British Foods (ABF)n Churchill Retirement Livingn Countryside Propertiesn Handelsbankenn Henderson UK Property Fundn Howard Property Groupn Industrial Property Investment Fund (IPIF)n Legal & General n Manchester Airport Group (MAG)n Marshgate Developments Ltdn Nockolds Solicitorsn Places for Peoplen Portland Place Plcn Redrow Homes Limitedn Ropemaker Propertiesn SEGROn Suffolk Life Annuitiesn Tees Solicitorsn Threadneedle Asset Managementn Weston Homes


COMMERCIAL PROPERTY SPECIALISTS

We are an independent practice of Chartered Surveyorswith 40 years’ experience in the field, and we offer a fullcomplement of agency and professional services including:

n INVESTMENTS

n VALUATIONS

n SURVEYING

n LANDLORD AND TENANT

n PLANNING ADVICE

n DEVELOPMENT

n SALES AND LETTINGS

n MANAGEMENT

n BUILDING CONSULTANCY

Bishop’s Stortford Head Office100 South Street, Bishop's Stortford, Herts CM23 3BG

01279 758758

Harlow OfficeSuite 128, Greenway Business CentreHarlow Business Park, Harlow, Essex CM19 5QE

01279 758758

A digital version of this publication can be downloaded at:


Richard Coke FRICS [email protected]

Richard is a FRICS Surveyor with over 30 years’ experience in propertydevelopment and occupier advicethroughout Eastern England. Please callfor an informal consultation in respect ofany property problem.

Adam Tindall [email protected]

Adam has been with Coke Gearingsince 2008 specialising in industrial,office and retail agency; he isMRICS and a Registered Valuer.

Kim Davison [email protected]

Kim’s role encompasses managing theoffice, PA/secretarial support andmarketing and business development.

Louise Campbell [email protected]

Louise is a commercial surveyor andRegistered Valuer who deals with bothprofessional and agency work, in particularthe retail and office markets.


Ivan has 17 years’ experience in theindustrial and office property marketsand has acted for an extensive range ofdevelopers, financial institutions,property companies and occupiers.

Sarah [email protected]

Sarah is responsible for finance andsuppliers and is Company Secretary.

Meet our Team

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Due to our continued development, we are activelylooking to recruit and for new business opportunities.If you would like find out more about us, have a lookat our website or contact Richard Coke for a chat.


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