Senior Surveyor within Bradley Hall’s Professional Services department, Carl O’Brien, explains the importance of strategic management ofcommercial property portfolios.
Senior Surveyor within Bradley Hall’s Professional Services department, Carl O’Brien, explains the importance of strategic management of commercial property portfolios.
There is no denying that handling a portfolio of commercial properties can be time consuming and often stressful. An asset of this scale, whether it be two or 200 properties, can be a significant source of income if utilised to its full potential.
Business-minded or well-advised investors often choose to invest in commercial property instead of relying on the interest rates of a bank account. The returns can be much higher, and the greater the risk, the greater the return.
During a lease, there are often several opportunities for landlords to conduct rent reviews in order to ensure the passing rent continues to reflect the market rent. Prior to initiating review negotiations, it is important to consider if a rental uplift is justifiable in line with the review clauses specified within the lease. To help determine this, an in-depth market assessment will be necessary to evaluate the local market conditions and similar completed transactions.
It is also advisable to deal with lease renewals at the earliest possible opportunity to prevent tenants from simply vacating the property, and thus bringing about an end to their lease, which they have the right to do as late as the expiry day. Where this occurs, the landlords would be tasked with dealing with dilapidations and finding a new tenant as a matter of urgency rather than having a firm strategy in place. The onus of insuring the property and for business rates becomes the landlord’s responsibility during void periods.
There are also break clauses that need to be monitored. If a tenant takes advantage of a break clause then it is important to ensure it has been served in accordance with the lease, otherwise it can be deemed invalid and thus void. It is also important to understand what the re-letting prospects are and whether there are any proactive measures that could be taken to improve these.
Record keeping of important dates is often something which landlords do not have time for and, as a consequence, miss out on important opportunities to maximise the value of their assets.
Bradley Hall’s Professional Services team has vast experience in handling the asset management of property portfolios of all types and sizes. Our dedicated team is able to prepare reviews for each relevant date, project managing negotiations and achieving the best return on investment for its clients.
The specialist team has a comprehensive knowledge of Landlord and Tenant Act statute and case law, and of the rights of landlords and tenants, so that our clients are correctly advised both before and during negotiations. Expensive local market knowledge and understanding of the detail of comparable transactions is utilised in every bespoke case.
For more information on strategic management of commercial property portfolios please contact Carl Obrien on 0191 232 8080 or email carl.obrien@bradleyhall.co.uk
