Norwich office market continues to see a strong demand for good quality accommodation ......
The Norwich office market continues to see a strong demand for good quality accommodation and where landlords are prepared to undertake extensive refurbishment tenants will follow. So far in 2015 there have been two noticeable transactions to underline this.
In February this year Roche acted in the letting of the final floor of Yare House, Norwich to BDO, who join the Broads Authority, Orbit Housing, Rostrons and Tobar. Yare House was previously the regional headquarters of Anglia Water. It was acquired by a private landlord and when Anglia Water vacated, they took the brave step to comprehensively overhaul including adding an additional floor and a new façade. The property is now the only fully let office in multiple occupation in Norwich. The quality of the accommodation, along with location has been the key selling point to occupiers.
Sam Kingston of Roche said" Yare House is a shining example of how a comprehensively refurbished building will let. There are a number of offices which have seen cosmetic improvements, but most occupiers see beyond this and in our recent experience, tenants are prepared to pay a premium price for the right property as they recognise the importance of a healthy and vibrant working environment."
With a very limited supply of Grade A space in Norwich now available any landlords prepared to refurbish accommodation could benefit from the imbalance between supply and demand for quality accommodation.
This trend is seen by the letting of 98 Pottergate, Norwich by Roche a self-contained premises with good car parking. The office was vacated by the previous occupiers and to make the accommodation more appealing the premises was comprehensively overhauled to provide a combination of open plan and cellular space. The premises were let before completion of the works to Lanpro a planning and regeneration specialist.
Sam Kingston of Roche commented" the refurbishment of this office gave it every chance to re-let. Although not in the core business district the condition of the property made it an attractive proposition for occupiers, looking for self-contained premises with good car parking."
Norwich industrial market has got off to a good start in 2015, with Roche acting on two noticeable transactions .......
Improving Industrial Market
The Norwich industrial market has got off to a good start in 2015, with Roche acting on two noticeable transactions totalling 167,000 sq ft .
In March Roche let a 34,000 sq ft warehouse to Angling Direct on the Rackheath Industrial Estate. The property had only been on the market for a short period of time after Royal Mail had vacated, before being re-occupied. Tilia Properties, the landlord, undertook an extensive refurbishment of the office element of the property and provided Angling Direct with a new larger facility for their expanding business which relocated from Aylsham Road.
Sam Kingston of Roche, acting for the landlord said. "the shortage of large warehouses over 30,000 sq ft is now evident and the speed at which this transaction completed was essential to enable the tenant to re-locate their business prior to their busy trading season". Nick Hovey of Tilia said" we are pleased to welcome Angling Direct to Rackheath, where they join a number of well know Norfolk businesses including Delta Fire and Milltech Engineering".
The second transaction was the recent sale of Caley Close, Norwich, to a local property company. Caley Close is a 133,000 sq ft warehouse premises which has been vacant for a number of years. It was purchased by Peter Colby Commercials that will now look to divide the premises into a number of smaller units, ideally around the 30-40,000 sq ft mark and with the warehousing market for larger space being very tight as demand appears to be outstripping supply
Sam Kingston of Roche acted in the sale and is retained on the subsequent letting of the property. He commented" The timing for the purchaser is ideal. There are a number of unsatisfied requirements of 30,000 sq ft and above. Due to the high demand for warehousing in the Midlands, we are seeing a number of occupiers look further north, away from the A14, and this is certainly helped by the recent completion of the dualling of the A11".
Roche Retail let the former HMV store, 21 Gentleman's Walk, to NatWest Bank .....
Norwich, 21 Gentleman's Walk, NR2 1NA
Roche Retail has let the former HMV store at 21 Gentleman's Walk to NatWest Bank. The property occupies a 100% prime location in Norwich City Centre and comprises over 13,300 sq ft, with a secondary entrance on to Davey Place.
Roche Retail acted for the landlord, Legal & General, and negotiated NatWest Bank taking a new 10 year lease at an initial rental of £325,000 pax.
Adrian Fennell, who heads up Roche's retail and leisure division, commented; "This is the most significant retail letting in Norwich for the past 5 years. NatWest opening one of their 'flagship' banking centres, reinforces Norwich's retail and commercial dominance in the region."
April 1st 2015 is not just April Fool's Day ..... it is also the actual valuation date for the 2017 Business Rating ...
Business Rates Update
April 1st 2015 is not just April Fool's Day ..... it is also the actual valuation date for the 2017 Business Rating Revaluation. Although the new rating list will not come into force until 1st April 2017, the revised values will be based on what will then be historic values as of this April. This ensures all properties share a common valuation date.
The basis for the revaluation will be market rental information pertinent to April 2015. It is acknowledged not all property will have a new rent established on that day as:
The premises may be occupied by the owner, rather than rented, or
There may be vacant accommodation, or
The passing rent may have been established at either an earlier or later date by way of a new letting, rent review or lease renewal.
However, in the majority of cases where premises have a contemporary rent, the rental evidence can be distilled into a rate per square metre, taking into account any relevant issues including the surrounding built environment, the physical characteristics of the premises, the lease terms agreed and any other pertinent factors.
The Valuation Office Agency (VOA) will consider all the evidence that it has collated to create a tone of values specific to an area that relate to premises of the same use, with the tone being adjusted to apply to each property, to reflect its unique characteristics.
Property occupiers may be asked to provide information on their property by the VOA, and should do so as it is a statutory obligation!
So, what this means is, any occupier who agrees a rent review or lease renewal or who acquires a new lease on premises in line with market conditions on or around 1st April this year, may have a good indication of the new rateable value which will apply in 2017. There is therefore extra incentive to make sure the rent is agreed at an appropriate level - to do otherwise might be doubly foolish
Jackie Crisp, FRICS, Partner, Roche Chartered Surveyors
Norwich will no longer be the largest city that is not connected to the motorway network via a dual carriageway ......
A11 dualling - the impact on commercial property
The long-suffering business community and residents of East Anglia that use the A11 as a means of connecting with the wider world, can finally look forward to the imminent opening of the last dual carriageway section of this vital trunk road.
Norwich will no longer be the largest city that is not connected to the motorway network via a dual carriageway. Journey times for people and goods will be reduced whilst predictability of arrival and delivery times will be dramatically improved. But what impact will this have on commercial property in East Anglia?
A sudden improvement in accessibility can change distribution patterns. The overall improvement in the accessibility of Norwich will undoubtedly enhance the City's appeal as a business location. However for distribution, it will now be easier for companies to cover the whole of East Anglia from, say, Thetford or Bury St Edmunds which are geographically more central. My firm is already advising logistics clients that are reviewing their operations in this way. Therefore, a boost for warehousing in the centre of the region.
Manufacturers will find it easier to get goods to and from East Anglia. This should reduce costs, improve service and therefore competitiveness. Logically, I expect to see improved demand for industrial units in Norfolk and Suffolk along the A11.
For retailers, critical considerations are catchment areas and drive-times. Therefore the big regional centres of Cambridge and Norwich will be further boosted by being more accessible from the centre of the region, possibly to the disadvantage of smaller towns between the main cities. Better communications within the region might also make East Anglia more attractive to big retailers such as IKEA and Decathlon as more households fall within an acceptable drive-time.
As far as offices are concerned, Norwich will be significantly enhanced, enabling it to challenge Cambridge with more credibility. With prime office rents exceeding £30 per square foot, arguably Cambridge has become over-heated. Norwich is roughly half this level and therefore well placed to take up the pressure. Norwich Research Park's competitive prospects are similarly enhanced.
It will take time for the consequences of this significant improvement in our road infrastructure to work through the economy and into the commercial property market. The overall impact will undoubtedly be positive but as improved accessibility opens up new markets, there will be greater challenges for businesses in some locations although I expect the over-riding impact to be extremely positive.
by James Allen, Senior Partner, Roche Chartered Surveyors, Norwich
With the changes in the economy and parties to a lease having an eye to every opportunity to improve their situation and ...
Break Clauses - Back to Square One
With the changes in the economy and parties to a lease having an eye to every opportunity to improve their situation and their business strategy, break clauses have become and continue to be a hot topic.
The drafting of leases historically, was, thought to create a water tight situation where both parties can rely on the lease to satisfy all scenarios in respect of break clauses.
However, changing times have proved this not to be the situation and case law is now prevalent and ever-changing on this matter. The leading case in these circumstances relates to Marks & Spencer PLC v BNP Paribas Securities Trust Company (Jersey) Limited and another 2014.
This case has recently been heard at the Court of appeal.
By way of background, a lower Court decision permitted M&S to reclaim rent paid in advance and which was relevant to the period of time after the break date itself. This earlier decision has been swiftly over-turned by the Court of Appeal stating "...it would have been obvious to the parties before they signed up to the lease that there was a possibility that rent would have to be paid on the last quarter day in full for a period which went beyond the break date. They would therefore have made some provision for this case". Obviously not!!!
This latest decision does give certainty in this situation and going forward it is evident this situation must be addressed in all future leases. Thus if the intention is for rent after a break clause to be reimbursed it must be stated so.
Not a welcome decision for tenants but at least it gives clarity.