All posts tagged "Investment"
Commercial property a safe bet?
(2026 Feb: LinkedIn). Property owes its reputation as a long-term hedge against inflation to its potential for rental and capital growth. But for commercial property it is, in my opinion, a reputation well past its shelf-life. A consequence of what is known as yield compression, the attraction of commercial property as a safe bet has […]
Shop Investment – a lost cause?
(2025 Oct) – I have said this before, and I’ll say it again, not in the same words, there are a heck of a lot of private investors that have no idea what they’re letting themselves in for when they buy shop property investments. Reality hits home on renewal of the lease. The cushion, of […]
Shop investment: direct or indirect?
(2025 Aug) – Shop investment: direct or indirect? Direct is owning the property, indirect is a shareholder. Which is better depends upon judicious choice. For direct ownership, cue is best taken from institutional investors. Pension funds have a longer time horizon. They do not pay 20 YP (5%) for 10 YP (10%) rack-rented investments. They […]
The River Island Saga
(2025 Aug) – The River Island saga is a stark reminder of the risk run when large landlords relax their investment policies that they apply to small businesses. Small businesses that are incorporated are normally expected to provide a personal guarantor when leasing premises, yet somehow the same strict approach is not required of multiple […]
Non-structural alterations
(2025 May) – For pre-contract enquiries, nowadays known as Commercial Property Standard Enquiries, “CPSE” for short, any temptation to answer most with ‘no’, or ‘not known’, or ‘not aware of’, is bound to be a waste of time. The person enquiring is sure to query anything that should be answered more fully. The information about […]
Unusual rent review
(2025 May: LinkedIn) In 1989, my client bought a property in South London prior to auction, let to a national retailer. The retailer closed the branch and offered a new intermediate lease for circa £1M which was bought by an investment company. That company sub-let the property to another national retailer. The rent reviews are […]
On lease renewal under LTA54, index-linked reviews are rebased to market rent for the initial rent.
(2025 May) – 1.0 Supermarket REIT plc buys supermarkets let on index-linked rents. Its debt interest rates enable it to pay dividends on the difference between rental income and operating costs (including borrowing). But how long for? 1.1 Supermarket REIT is not the only prop co that buys index-linked rented property. Almost all, if not […]
The Law Commission consultation on reform of the Landlord and Tenant Act 1954 Part II
(2025 May) – The Law Commission having allowed me to contribute two days after the official end of the first Consultation, I ran out of time to address the LC’s questions, so said the following (edited): …whenever instructed to act for a landlord or a tenant, I start by saying “it should be easy to […]
How a limited company can be rid of a lease?
(2025 May) – How a limited company tenant can be rid of rent and lease liabilities. Where a tenant is a limited company, it does not (normally*) need the landlord’s consent to assign the tenancy. The only necessity is to sell the shares in the company. Where the company has assets its director(s) want(s) to […]
Rent and Inflation
(2015 Jan) Whether landlord or tenant, it might be of interest to check whether the rent you are receiving or paying has kept pace with inflation, as measured by the Retail Price Index.I have designed a calculator that calculates the percentage change in the RPI and the adjusted rent. It;’s a two stage calculation. You […]
Valuation and Over-Paying
(2014 Mar) – I want to dispel a widely held notion, the strong belief in which leads to investors overpaying for shop property. It is a notion that has contributed to substantial over-valuation (along with over-mortgaging by the banks and other lenders) of shop property investments for more than three decades. When you buy a […]
Pension Plan
(2014 Jan) – A pension is a long-term commitment and tax relief is attractive, but setting-up fees and on-going charges for pension plans can be disproportionately high. I suggest thinking inside the box. The question to ask is: would the proposition be worth buying if there were no tax advantages? Many property investment schemes and […]
Investment
(2014 Jan) – Investment is about becoming better off, financially, and whatever you invest in is known as an ‘asset’. (Whether an asset goes up (appreciates) or down (depreciates) in value doesn’t make it less of an asset. Whether it can turn into a liability is a separate issue! Investments are categorised as liquid or […]
Growth
(2014 Jan) – The rate of growth is a combination of rental and capital growth. Although capital growth is often rental-dependent, a higher price may be obtainable from an owner-occupier rather than an investor or developer. Also, because a difference can exist between the value of a property and a proposition, investment sentiment can affect […]
Negotiation – restoring the balance of power
(2013 Dec) Notwithstanding Reed Personnel Services plc v American Express Ltd [1996] wherein the court said it is “not good for the tenant to say what is good for the landlord” many tenants are fond of negotiating as if they were the landlord. Although technically cutting no ice, it’s an approach that can succeed when […]
Guarantor v Rent Deposit
(2013 Dec) Where a tenant is a company and the landlord requires a director as guarantor or a rent deposit, that person is exposed to both the risk of rent and all other terms and conditions of the tenancy, should the company default. But an advantage to the tenant in opting for a guarantor is […]
Letting a Tenant off the Hook
(2013 Jan) With a business tenancy, agreeing the documentation is rarely straightforward at the best of times so, unless the lease contains a tenant–break, a landlord won’t normally expect the tenant to want to quit before expiry of the contractual term. When a tenant asks to be let off the hook, whether to agree or […]
Readiness for Sale – A Guide for Streamlining Commercial Property Transactions
(2012 Jun) “In 1995, a working party was set up by the Investment Property Forum (IPF) to consider existing procedures for the acquisition and disposal of real estate and to recommend improvements that would speed up the sale and purchase disposal process. The consultation led to the publication of ‘Readiness for Sale’ in 1996. 16 years […]
Buyers of property to let less deserving of protection
(2011 Jun) Per Scullion v Bank of Scotland plc (t/a Colleys) [2011] the Court of Appeal has overturned the High Court decision that for buy-to-let residential property the valuer was liable to the purchaser. The CA held that although the valuer had been negligent and the purchaser had relied upon the valuer’s report (amongst other […]
Good time to invest?
(2009 Sep) It seems to me there are a growing number of people thinking to themselves now seems like a good time to invest in shop property. But I’m not convinced. Not because life’s difficult for many retailers, and that for many struggling on in the hope of surviving is possibly about the best they […]
Distressed Sellers
(2009 Sep) “Distressed” seller is the latest way for sellers to get rid of rubbish. The sort of properties that nobody else would buy. Start off by putting on the market over-priced. Expect to sell for much less. Attract interest, consider offers much lower than the quoting price. Do some due diligence as to whether the buyer […]
A rare opportunity for landlords
(2009 Jun) Now the credit-crunch has settled, landlords have a rare, possibly unique, opportunity to determine the future of retailing, for good. As I see it, a lot of hard-working decent honourable tenants, good at what they do, have found their property costs inflated as a result of the legacy of a bunch of irresponsible […]
The Future for Secondary Shops
(1984 Dec) – The historic development of shopping centres makes fascinating reading. Originally, as people went to market, so came permanent shops. In the post-war housing boom, shops started going to the people and even today, new council housing estates boast a block of shops. The radical change in socio-economic patterns, and the real decline […]
Company News
(1984 Dec) – It cannot come as much surprise to learn that Motorist Discount Centre, with some 300 shops selling motor accessories, has gone into receivership. With the notable exception of Kwik-Save, the northern-based supermarket group, nominal capital commitment to shop fitting is often a sign of a short-term trading philosophy. The acquisition of Cullens, […]
Research or Gut-Feeling?
Dec 1984 – In an increasingly complex economy, research is rapidly intruding upon the traditional province of the valuer: gut feeling. The mixing bowl, into which statistics, “informed” opinions, records of past transactions and trends are all technically blended, creates a science out of prediction. An objective appraisal from a source with influential but vested […]
Warning Signs
(1984 Sep) – News is coming through that the banks are tightening up on their lending to Asian buyers for grocery businesses. Asians tend to treat their business interests as family concerns, injecting sizeable capital funds from consortium or family sources, with bank loans over 5-10 years, in exchange for an income level which would seem derisory to […]