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Newsletter

Autumn/Winter 2014

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A time for optimism

Six years after we crashed - and after half a decade of very little movement – the commercial property market is hotting up again.

 

Five years of uncertainty has seen investors shy away from commercial property in favour of safer bets.

 

But for 18 months now the UK has been seen now as economically stable. Our massive stock of commercial property is now a very good bet for investors, both home and abroad. And they’re coming to town!

 

There’s an increasing demand from businesses for freehold and leasehold property accross all sectors including hotels, cinemas, gyms, student housing and private healthcare facilities. It’s impacting on rents, as there is a shortage of stock especially new build opportunities.

 

There’s much to be optimistic about.

 

Vanessa Penn, Director

Featured Items

Louise Jukes

Rescue plan for bank

Smart moves in Ipswich town centre

Spring Road Student Accomodation

A change of direction

Three Rivers has now changed course

Maple Distribution Centre, Beecles

In the spotlight

Vanessa promotes commercial property investment

Alstons Factory, Ipswich

WANTED!

More industrial property to meet demand

Barefoot & Giles

T&Cs should apply!

Landlords and tenants need to get it right from the start

Spring Road Student Accomodation

Spreading our wings

While one of our strengths is our local knowledge, that’s not the whole story

Maple Distribution Centre, Beecles

A chilling prospect

Landlords need to take new energy regs seriously!

Alstons Factory, Ipswich

Property Asset Management Conference

Penn Attends conference hosted by Estates Gazette

Latest News Articles

Investment rescued for specialist bank

Specialist commercial bank, Investec Bank plc, has significant business interests in Ipswich town, including a site on Star Lane that had sat vacant for some time and was deteriorating badly. It was repossessed by the bank 18 months ago. Noting that the site had been on the market for some time, we made contact with Investec about letting the buildings. We’ve since attracted two businesses to the site: a furniture showroom and an upmarket bowling alley. We’ve since been instructed on several more Investec sites in the town.

Three Rivers takes new direction

The rural business park on Felixstowe Road, Ipswich, now known as Three Rivers, was built in 2007. It was never more than 20 percent. Narma appointed us to dispose of the site. The site was, by then, neglected and existing tenants becoming increasingly unhappy. The buyer, Norwich-based businessman Peter Colby, recognised that the site had plenty of potential. He appointed us to let and manage the site on his behalf. Paul Keen has overseen extensive work on the site. It has been refurbished, repairs carried out, re-landscaped, new secure and automated gate system installed, electricity supply upgraded and new sewerage treatment installed. We’ve since let two further units – 3,700 sq ft to Skanska and a 2,100 sq ft to Westminster Recliners and have three more units under offer. We have now let 70% of the space.

In the Spotlight

At the end of October, Vanessa was one of “eight lucky members” to be interviewed by award-winning local radio broadcaster, Rachel Sloane.The interview took place in front of a live audience of business people – all fellow members of the Ipswich & Suffolk Small Business Association (ISSBA). Vanessa and IFA, Karen Last, were asked whether it was a good idea to invest pension savings in commercial property. Vanessa was very much in favour – as you would imagine! Karen was a bit more cautious, as you might imagine. But as a considered part of a portfolio of investments, she thought there were good returns to be made.

Imminent shortage of Industrial Property

Suffolk is in urgent need of more industrial and warehouse accommodation, says Vanessa. She believes lack of stock is in danger of blighting future growth. “There are lots of plans on the table for residential development,” she says. “But there’s not much land being allocated and property being built speculatively for employment purposes.” The fact that we have Felixstowe on our doorstep, there’s an upturn in the economy and growing demand from logistics companies, means there’s a lot going on in east Suffolk. There are some plans in the pipeline. But, says Vanessa, it’s too little to meet demand. “It’s frustrating to see all that demand out there, and so little in the pipeline to satisfy it,” says Vanessa. “We have so much interest and can gain so much as a county.”

Terms & conditions apply!

If you’re a tenant or a landlord, there are few things more important than a Schedule of Condition. It’s a vital document – preferably in both written and photographic form - that saves dispute when the lease period comes to an end. For you as a landlord, it means that your tenants can’t argue about any damage they might have caused. All kinds of wear and tear can come about – some you’d expect (like some reasonable wear to carpets and paintwork), but to have to deal with the prongs of a forklift damaging a roller shutter door is another matter entirely! And as a tenant, it means you have the safeguard of an accurate record of what damage or wear was there when you took on the lease. It’s a very useful back up too if either party ever needs to make an insurance claim. Of course, everyone playing their part in the maintenance and upkeep of a building, inside and out, is the ideal. But how often can you expect that to happen? We’re happy to offer advice on a Schedule of Condition. Contact Paul Keen for details.

Spreading our wings in other areas too

While one of our strengths is our local knowledge, that’s not the whole story. Increasingly we are being recognised for our tenacity and can-do approach in other areas too. Following our success in aquiring a 57,000 sq ft warehouse in Basildon on behalf of Yodel last year, we also recieved instructions on a former parcel depot in Norwich. A private client has instructed us on a prime leasehold site in Enfield. We’ve also got a two storey shop in St Benedict’s Street, Norwich home to many independent shops and businesses and a large shop in Hadleigh and Woodbridge.

A chilling prospect for landlords

Margins between energy demand and generation are very significantly diminished. And this is likely to mean that there’ll be little mercy for those who don’t meet the terms of The Energy Act 2011 and 2012 Energy White Paper. They gave commercial property landlords and owners until April 2018 to bring their properties up to a higher standard of energy conservation. And time is ticking away. £29bn is the estimated cost of getting all those “substandard” 200,000 commercial properties (an estimated 16% of total stock) in England and Wales up to the required standard. Those that don’t achieve an EPC rating of at least E could become illegal. There’s a long way to go and not too many signs as yet that the industry is taking this as seriously as it should. April 2018 is just three and a half years away.

Penn attends Estates Gazette 2nd annual Property Asset Management Conference

Commercial property doesn’t exist in a vacuum. This was made abundantly clear by the various speakers at the recent The 2nd Annual Property Asset Management Conference, hosted by Estates Gazette. While the economy may be improving, there are still major uncertainties that are having a major impact on commercial property. Chief among them are the 2015 election, the prospect of an exit from the EU and ongoing concerns about interest rates. But also, new EPC legislation, discussed elsewhere in this newsletter, may make thousands of properties uninhabitable in just a few years time. And landlords are feeling the pinch. Their margins are squeezed, but so are those of their tenants. And tenants are increasingly bullish in their approach. So it’s perhaps time for a rethink. The US approach to tenancy is somewhat different to our own, and we may have something to learn from that. As just one example, they draft leases in such a way as to exclude dilapidations, only wear & tear plus fixed uplifts. The answer may be to think more like tenant than landlord. What do tenants want? How can landlords make their proposition more appealing? It’s likely to be more than just flexible lease arrangements. Service charges, break clauses, stepped rents, 24/7 access are all areas where a landlord can make an offering more appealing to a tenant. We live in a fast changing world. Post-recession there are new challenges and it’s time we stepped up to meet them.

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