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Era property

  1. 1. Your Property Teamfind extra profit Expense Reduction Analysts
  2. 2. Quick reference Introduction 3 Dilapidations 10 Strategic Property Costs Review 4 Aquisitions 12 Business Rates 6 10-Stage Acquisition Process 13 Rent Reviews & Lease Renewals 8 Corporate Property Advice 162 Quick Reference
  3. 3. IntroductionExpense Reduction Analysts Property offers a dedicated range ofservices specifically tailored to occupiers. We have no allegianceto landlords and developers and can therefore be confident thatother competing interests do not influence our efforts.Conventional property advice often focuses property costs and exposure match youron individual services that do not necessarily business needs. As we are part of Expensetie into a coordinated approach and do not Reduction Analysts, ongoing property costsalways match the Client’s expectations. is a constant driver of our service whetherWe will, where appropriate and if requested, we are handling business rates, dilapidations,always refer back to how the subject rent reviews or acquisitions.activities reflect the business objectives,not just in the short-term but also over Furthermore, this carries through to our feethe medium to long-term. bases which will always be offered to you including a results basis. This cost focusedOur Property Team maintains a focus on best approach is the ethos of the network andvalue and this can be demonstrated through clearly demonstrates that, together, wesimple comparison tools to ensure your can achieve significant savings. Introduction 3
  4. 4. Strategic Property Costs Review Rationalise Annual Property Costs In the current market you might well be Our initial analysis will look at: affected by economic uncertainty and therefore you may wish to consider • Group turnover/profitability reducing your property costs. • Operating costs • Floor space Our property experts can undertake a review • Headcount of your properties to identify opportunities to • Acquisition criteria reduce ongoing costs through, for example, • Lease terms/book value identifying and disposing of surplus space, • Market values advising on new working practices that • Void space – whole buildings reduce the need for space, renegotiating or within buildings leases or mitigating dilapidations liabilities. Following this scoping review, we may uncover specific action points for you that can demonstrate tangible savings for your company. We can work from your current expenditure levels to produce benchmark prices to verify the results.4 Strategic Property Costs Review
  5. 5. This data could then be used to We will then have specific benchmarkscompare performance across the which can be used to compare sites withinportfolio to identify: a single company and also overall costs compared to industry standards. These• Performance measures including costs would then guide many future cost/employee/turnover per square foot decision making strategies and could• Effectiveness of site acquisition and be backed up by further qualitative disposal strategy property analysis, when needed.• Exposure by site/store/portfolio• Trouble spots• Relocation/closure options – after liaising with local managers• Accuracy of provisions• Effectiveness of disposal programme – restructuring• Individual site/store analysis• Head office costs Strategic Property Costs Review 5
  6. 6. Business Rates Save £££’s by dramatically reducing your business rates. All fees are charged on a ‘no saving, no fee’ basis, so if there is no rates saving, there would be no charge. The business rates that a company pays What process would we follow? can be reduced through an appeals process and savings are possible over a five-year In order to focus on those appeals that period. The average reduction in rating create a stronger opportunity for savings, assessments by our specialist team is 14%. we initially correspond with our clients to gather key information about their The current rating revaluation is effective property and any proposed changes. from April 2005 and definite opportunities exist to reduce business rates up to 2010 and An inspection is usually then undertaken beyond, when a further revaluation takes followed by recommendations on whether place. The revaluation reflects movements in to appeal. The matter will result in the property market and the rates bill you negotiations with the Valuation Office, receive from your Local Authority may have hopefully achieving savings. Following been rising above inflation to take account any settlement, we will liaise with the of these changes. However, a proposal can be Local Authority to ensure the saving is lodged against your rateable value and any refunded correctly to you. reduction could benefit you over the whole five-year period of the revaluation.6 Business Rates
  7. 7. Tower chartReach for the low hanging fruit!Additional savings opportunities exist where accommodation that previously mayphysical changes exist in the locality that have had reduced or zero rates but nowhave a negative impact on a rateable value. have a full charge. Each property wouldClients may be able to secure a temporary be considered differently and pro-activelyreduction in the rateable value up to 20%! but there is still excellent scope for savings here.There may also be further opportunitiesto reduce rates liabilities for empty Business Rates 7
  8. 8. Rent Reviews & Lease Renewals Are you paying over the odds for your rent? When a landlord quotes a revised figure at Our service comprises: rent review or for a new lease, the quoted rent can be challenged, based on a detailed • Undertaking a detailed inspection of the understanding of the lease, together with premises, together with a full and market evidence. thorough reading of the lease provisions • Analysis of the rental evidence and details An adviser should be involved at an early of any rent-free incentives provided stage to provide the correct advice, including • Meeting the other appointed Surveyor checks for any ‘time of the essence’ clauses. to compare lease findings, details of the property and comparable evidence In undertaking a rent review, it is extremely • Negotiations important to initially value the covenants • Recommendation reports to the Client contained in the lease and relate those to regarding the level of rent that is comparable evidence. applicable having compared the evidence put forward by both parties, leading eventually to an agreed rent, failing that, reference to independent Third Party mediation. We welcome the opportunity to discuss your requirements in more detail and look forward to arranging a meeting to showcase our service, expertise and our commitment to meeting your needs.8 Rent Reviews & Lease Renewals
  9. 9. Interested?What you should do next?We will require a copy of the lease and any You can rest assured that we offer expertise,rent review memoranda if appropriate. up-to-date market knowledge and a genuineHaving discussed the situation, we will enthusiasm for communicating with ourcreate a brief audit report of our advice. clients.We will then provide initial advice on ouropinion of rental value. Should your lease be due to end, there are also opportunities to renegotiate the terms and possibly a rent reduction along with any other more favourable terms that are re- quired. Rent Reviews & Lease Renewals 9
  10. 10. Dilapidations Lease coming to an end? Unsure of your responsibilities? Typically, a tenant is responsible for the Our service includes: upkeep of their property during the period of their occupation. Upon expiry of a lease, • Understanding how to interpret the the landlord can instruct a surveyor to repair clauses in your lease establish whether there are any breaches • Determine whether the repairs are of these responsibilities and demand required under the terms of your lease payment for losses incurred. • Consider the impact of any tenants improvements It is possible through an understanding of • Calculating the cost of repairing the client’s lease, the property and property the breaches law to query the amount of the claim. This • Evaluate what impact the current can enable us to set about reducing this condition of the property has on its claim and ultimately saving money for re-letting capability the occupier. • Respond to the landlord or the surveyor on your behalf A Landlord’s claim will provide a full • Negotiate potential savings with the breakdown of the alleged breaches, the landlord or the surveyor required repair works, the cost of these repairs and associated fees. On some occasions, there may also be an element for loss of rent, as the landlord will allege that the condition of the property has harmed its re-letting capability.10 Dilapidations
  11. 11. Success StoryNational Client We were able to review all the allegedLocation: Weston Super Mare breaches and review if the required repairsLandlord’s surveyors prepared a Schedule and redecoration were reasonable. In manyof Dilapidation and Wants of Repair and cases we were able to establish elementsRedecoration amounting to a total claim that were unreasonable.of £56,500. As property specialists, we undertook aWe initiated our involvement with a review looking at whether the allegedthorough review of the lease and also breaches would actually damage thearranged a joint site inspection with the potential letting of the client’s formeropposing surveyor. accommodation. If we could argue the space would let just as readily, it couldWe were able to identify parts of the claim be possible to effectively dispute mostthat our client was not liable for, as they of the claim.were outside of their leased area. It wasalso apparent that parts of the property Finally, we evaluated the Landlord’swere in poor condition and it would be surveyors fees and considered if these weretantamount to an improvement to incur deemed to be excessive. We successfullythis expense. negotiated a reduction in the claim from £56,500 to £28,000, effectively halving the amount. Dilapidations 11
  12. 12. Acquisitions How shrewd are your Expense Reduction Analysts property negotiations? Property? Acting nationally on many property We have an extensive knowledge of the acquisitions, we tap into the latest deals agency market, courtesy of our corporate meaning that we are perfectly positioned property role to a national client base. to offer advice on rent and pricing whilst negotiating the best deal for the client. Furthermore, the knowledge we acquire about our client’s business, together with We ensure that the proposed terms are fair our knowledge of the property market, and protect the client’s interests now and provides us with the best opportunity in the future. to identify properties that suit your requirements. We don’t waste your time offering numerous properties that simply do not match your needs.12 Acquisitions
  13. 13. 10-Stage AcquisitionProcess Expense Reduction Analysts’ 10 Stages to Successful Property Acquisition 10 Exchange and 1 Confirm the Complete Acquisition Criteria 9 Consider Related 2 Summarise all Property Services Available Properties8 Further Inspection 3 Create a Short-List of Property of Properties to View 7 Agree Heads of 4 Conduct Terms Inspections 6 Negotiations on 5 Short to Long- Selected Options Term Impact 10-Stage Acquisition Process 13
  14. 14. 10-Stage Acquisition Process 1 Confirm the Acquisition criteria. 4 Undertaking, either with you or Structuring a brief to identify exactly independently, a thorough inspection what you require, including location, of the options, creating a precise size, configuration, quality, car parking, comment on suitability. accessibility and cost parameters. 5 After inspecting your selected list of 2 Creating a full and thorough list of all properties, we will comment not only possibilities that meet the above brief, on the short-term, but also observe including collation of brochures and the impact over the long-term such as plans of all options. planning issues, future development opportunities and the impact of lease 3 Discussing the list of possibilities with obligations. yourselves, providing direct comments where suitable, with a view to creating 6 Agree the acquisition of a selected a shortlist of best options. Once this option, whilst at the same time has been achieved, then the process of ensuring that the other suitable acquisition can proceed. options are kept live in reserve, so as not to give the preferred option any advantage.14 10-Stage Acquisition Process
  15. 15. 7 Agree detailed Heads of Terms for an Our involvement will always keep your acquisition (or renewal) including interests as the foremost requirement, and demise, lease length/tenure, hopefully will keep your time commitment rental/price, repairing covenants, to a minimum. The importance therefore in service charge levels, legal costs and structuring an accurate brief that we can all any incentives available. work to cannot be stressed enough and our work will be undertaken swiftly and with8 Once Heads of Terms are agreed, to minimum fuss for you. undertake a final inspection of the property and to verify floor areas etc. Our fees are typically charged on a percentage of the acquisition price or9 At this stage to offer, if required, other rental amount, with no fee payable if services such as Rating, Building a suitable property is not identified. Surveying, schedule of Conditions etc.10 Proceed to an acquisition of the selected options alongside your legal advisors to ensure that any legal agreement properly reflects the negotiated terms. 10-Stage Acquisition Process 15
  16. 16. Corporate Property Advice Encompasses all Property Services Profit through property What is involved? Our aim is to reduce the medium term Through an experienced and focused solution that is inevitably associated with approach, we will initially gather an commercial property, to a managed process appreciation of your company, your current that allows property to perform as an asset. property portfolio and costs relative to your company turnover. Strategic property decisions need to be at the forefront of your business to We believe that it is important for us to improve your company performance. understand if your company occupies large properties on long leaseholds or if you In line with this, it is ideal to then create a require short-term leases based on a corporate property strategy to coordinate localised work contract. Alternatively, the separate elements that are involved in you may prefer to trial new locations first the property process. We know that property and require lease flexibility, or your decisions are generally a reactive response business may demand a substantial amount to a particular request or event and they of alterations to a property before you can may not be part of an organised plan. commence trading. Following our initial appreciation of your long-term business and property goals, we will create a strategy based on your needs, providing specific advice using our expertise and understanding.16 Corporate Property Advice
  17. 17. The Strategy Benefits• Read and understand all tenure • Achieve Client objectives• Create a terrier of data • Create a better property understanding• Devise an acquisition/disposal list and control of Clients property• Budget for rent reviews • Meet with Client on regular basis• Create a database of inspections • Appoint and manage local advisers and properties • Charge market fees for work types• Record for lease renewals, critical • Enjoy a full and rewarding client/advisor break dates, repairing frequencies, etc. relationship that benefits all parties • Save Client money/budget for costsThe Actions How is this different to• Assess and budget for dilapidations conventional advice?• Help local branches deal with Landlords/Tenants All too often companies acquire and• Carry out rent reviews/lease renewals dispose of property in an ad-hoc fashion,• Carry out acquisitions/disposals which places unnecessary time pressures• Advise and challenge business rating on the personnel involved and is also likely assessments to cost your company money, either today• Planning advice for own use and/or or in a few years time or at the expiration higher value uses of a lease. Corporate advice applies a• Appraisals and valuations planned strategy to your decision making,• Bring forward pro-active ensuring fewer surprises and hence saving recommendations you money.• Act as an equivalent in-house property team Services 17
  18. 18. How will it benefit you? How are fees charged? Your company will notice improved These can be charged on a fee basis that performance, as you will have the correct best suits your company. There would property structure in place to support your normally be a base charge and then a operations. percentage fee is usually charged, for example on the acquisition costs or In addition, you will experience cost based on cost savings. savings as this planned and preventative action avoids surplus space, reduces Expense Reduction Analysts services are dilapidations costs and avoids excessive undertaken by consultants whose firms occupancy costs of rent, business rates are members of the Royal Institution of and service charges, Chartered Surveyors (RICS). RICS is one of the most respected organisations for property professionals. As members they are highly experienced, chartered professionals offering impartial, specialist advice.18 Services
  19. 19. The Expense Reduction Analysts Property Team canachieve, on average, savings of 30% for its clients.To find out how you can benefit from this servicecontact your local specialist.
  20. 20. find extra profitArgentina Australia Austria Belgium Brazil Canada Chile Columbia Ecuador FranceGermany Greece Hungary Jordan Italy Lebanon Luxembourg Mexico Morocco NetherlandsNew Zealand Panama Portugal Spain Taiwan United Kingdom & Ireland United States Uruguay Expense Reduction Analysts