Case Studies - Altus Property Service

Just a few of our success stories.

  • Business rates savings to date

    £1billion+
  • Sq Ft of Transaction Instructions

    20million+
  • Clients

    35,000+
Building exterior

Case Study

Mercer Ltd

£2million Savings

The Challenge

Mercer Ltd had a single lease on the 6th and 7th floor of Sunley House, Croydon and the 6th Floor was surplus to requirements.  They had a rent review and lease break option due in July 2018 with a 6 month notice period to serve the break notice.

The Solution

Mercer Ltd instructed Altus Group to negotiate both a surrender of the 6th floor and the July 2018 rent review.  We were instructed shortly before the break notice needed to be served. We therefore immediately opened negotiations highlighting to the landlord the significant risk of Mercer operating their break notice and vacating both floors.  Altus Group negotiated a surrender of the 6th floor and settled the rent review on the 7th floor ahead of the break notice date.  This allowed Mercer to continue operating from this location and with a rental saving of over £2 million for the 5 year review period.

Inside industrial warehouse

Case Study

Bunzl Plc

£225,000 Savings

The Challenge

Bunzl’s occupancy at Agecroft Commerce Park in Swinton, Manchester initially consisted of two adjacent modern logistics warehouses with a total size in excess of 26,000 square metres. Each warehouse was operated by a different Bunzl subsidiary and both had independent access including office space. However, they were still adjacent to each other and only separated by a fence

The Solution

Following our instruction for the 2010 Revaluation, Altus Group dealt with the Specialist Rating Unit (SRU) at the Valuation Office (VO) and persuaded the SRU that there should be only one unit of assessment which should be valued in line with Regional Large Distribution Warehouses. The successful merger and reduction was actioned via a VO Notice on the 2005 and 2010 lists.

Roof joists on new building

Case Study

Select Developments

£600,000 Savings

The Challenge

Following the acquisition of a £13M office park in Bracknell for the purposes of conversion to a £32M residential scheme, a Check submission was required to correctly ascertain the RV of the property. Select Developments was faced with on-going business rates payments until the outcome of the appeal.

The Solution

The Business Rates Team at Altus Group were able to negotiate a suspension of business rates payments whist submitting a Check application to VOA to ultimately reduce the business rates liability to nil. The outcome of the appeal was successful, which combined with the payment suspension, resulted in project cash-flow savings, from month one, of circa £50,000 per month or £600,000 over the course of the development period.

Conveyor belt in factory

Case Study

Prolog

£648,000 Savings

The Challenge

We advise Prolog who occupy 1.2 million square feet across 6 distribution centres at Sherwood Park, Nottingham. 2 units of 186,000 sq ft and 124,000 sq ft both fell subject to rent review on the same date. The landlords were seeking substantial rental increases and it was not possible to agree either the general valuation rate and that a significant discount should be applied to the concrete mezzanine floors for which the landlords were applying a full rate to.

The Solution

We referred both reviews to Arbitration and in both cases the different Arbitrators agreed with our valuation rate for the mezzanine floors. Furthermore, we were completely successful in both arbitrations resulting in total rental savings from the landlord’s proposals of £684,000 over the 5 year rent review period.

Van on road

Case Study

PDP Couriers

£154,000 Savings

The Challenge

The 2010 Rateable Value for our client PDP Couriers had substantially increased from £80,500 to £120,000 in April 2010 due to the Valuation Office Agency applying a substantial increase in the cost per square metre for both office and warehouse space.

The Solution

Using our extensive rental information resource, we provided the Valuation Office Agency with comprehensive rental evidence that resulted in an agreed reduction of the cost per square metre of workshop space in this Valuation Scheme from £154 to £84. This resulted in a new Rateable Value of £67,000 and total savings of £154,000 for the duration of the 2010 Revaluation.

Industrial units

Case Study

CBRE Gi

£834,600 Rental Increase Achieved

The Challenge

Altus Group has advised CBRE Gi in respect of a popular trade park in North London totalling 11 units. Instructions were to negotiate 6 rent reviews and lease renewals where the passing rents were significantly less than the recent open market evidence that had been created on the park.

The Solution

Altus Group advised the client in respect of rental values and length of leases to be negotiated. The negotiations occurred over a 2 year period, successfully resulting in significant rental increases and in line with the open market evidence. Whilst third party and court applications had to be made in cases where agreement was difficult, negotiated settlements were reached in all cases. The rental increase over the 5 year review periods totalled £834,655 averaging at an annual increase of 29% and up to 49% for one particular negotiation. For the lease renewals, 10 year leases without break options were secured despite the tenants’ contention for 5 year terms.

Watch face

Case Study

Rolex Watch Company

£709,000 Savings

The Challenge

This is a bespoke modern office building designed and built specifically for Rolex as its Headquarters and European Repair Centre. The building is approximately 15 years newer than any other building on the estate with a state of the art cooling and heating system. It is set in an isolated area of the estate but with a prestigious entrance surrounded by a moat. There are numerous security elements, including a security fence around the perimeter of the plot, CCTV and remote control bollards making this is a very complex assessment.

The Solution

The rating assessment for this building was valued at a much higher level than the older buildings on the Estate due to the individuality of the property. The Valuation Office Agency applied an uplift of 32% initially, however after much negotiation, we agreed that it should warrant only a 7.5% uplift. This led to a reduced 2010 and 2017 Rateable Value being agreed and savings of over £700,000.

Post office sign

Case Study

Royal Mail

£300,000 Savings

The Challenge

Royal Mail occupied a warehouse and yard under separate leases in Southampton. The landlord proposed significant rental increases at review and Altus Group was instructed to act for Royal Mail.  Both leases had only 5 years left until expiry and the tenant did not benefit from security of tenure.  Royal Mail required the rental increases to be mitigated at review and for their ongoing occupation of the site to be secured.

The Solution

We engaged with the landlord’s advisor providing supporting rental evidence for both the yard and warehouse, highlighting the intricacies of the lease provisions to support a limited rental increase in both cases at review.  Furthermore, we negotiated new reversionary leases for the two demises for a further term of 10 years both with rent reviews at lease commencement. We negotiated rental savings of £300,000 from the landlord’s rental proposals over the 5 year review period and secured the continued occupation for Royal Mail for this important site.

Doctor

Case Study

Riverside Hospital

£450,000 Savings

The Challenge

The property consisted of a few office units and had been acquired and refurbished to comprise a fully functioning cosmetic hospital with operating theatres and en-suite bedrooms. The accepted approach to the valuation of private hospitals is to apply a contractors approach to valuation which seeks to reach an adjusted replacement cost which is decapitalised to give an annual equivalent. The Valuation Officers view, quite understandably, was that these units must now be valued higher than an office rental basis.

The Solution

After lengthy discussions with the VO, it was agreed that the base value should be the rental equivalent of an office and it was also argued and accepted that much of the cost of refurbishment were non rateable and therefore a much lower amount was taken and amortised to give an addition to reflect the hospital fit out. This produced a much reduced Rateable Value and substantial savings for the client.

Vaillant control panel

Case Study

Vaillant Services

£300,000 Savings

The Challenge

Vaillant Services occupied office premises in Belper in conjunction with their main holding opposite. The lease was due to expire in two years. Perceiving that it would only be practical to remain in occupation if the building is refurbished, negotiations had to be conducted in respect of both new lease terms and to secure a landlord’s contribution towards the refurbishment.

The Solution

Altus Group was instructed by Vaillant Services and undertook negotiations with the landlord. We negotiated terms for a new lease satisfying the client’s requirements on term, rent and the proposed works.  An incentive package was achieved for the client representing a saving of £300,000.

Lindab image

Case Study

Lindab

£226,750 Savings

The Challenge

Our client Lindab occupies industrial premises in Trafford Park, Manchester, which were subject to rent review. The premises are approximately 42,500 sq ft and the passing rent £198,360 pa. The Landlord proposed a rental increase of more than 20%. In addition to the requirement for an acceptable rent, Lindab wished to undertake structural alterations to enhance the efficiency of their business. However, the lease prohibited the type of works required.

The Solution

Altus Group negotiated with the landlord and successfully achieved a rent reduction from the landlord’s proposal of £250,350 pa to £205,000 pa, representing a modest rental uplift of 3.35%. As part of the agreement, landlord’s consent to the proposed works was secured. The settlement represented rental savings for Lindab of £226,750 over the 5 year review period.

Computer Screen

Case Study

VTA

£143,250 Savings

The Challenge

Altus Group was instructed by VTS who occupy industrial premises on an estate in Hayes, Middlesex.  The site includes a very large car park. At rent review, the landlord’s surveyor argued for a significant rental increase from £168,750pa to £237,650pa, attaching much value to the yard.

The Solution

Our Surveyors researched the immediate area for rental values to apply to the yard. It became apparent that there was a need to cast the net wider and evidence was obtained to demonstrate that the rental value for the yard area should be much less than the landlord’s proposal. Convincing the landlord was difficult but after making a third party application, agreement was reached saving the client £143,250 over the 5 year rent review period.

Bar pumps

Case Study

A Place Called Common Ltd

£17,000 Savings

The Challenge

This public house went into liquidation during the 2010 Revaluation and was acquired by A Place Called Common Limited. During the liquidation, the premises were refurbished and updated to form a restaurant/pub. The Valuation Office took the opportunity to review the 2010 Rateable Value increasing it from £39,500 to £54,000.

The Solution

As a public house, the rating assessment is based on a percentage of gross receipts but as the Valuation Office had no actual trade figures to use, it assumed a level of trade that the Manchester based Business Rates team felt was unjustified on review. We discussed the limited available trade and the level of assessment applied to other comparable venues in the locality and as a result the Valuation Office reduced the assessment to £47,000 which generated £17,000 of savings for the client.

Inside Cavern pub, Liverpool

Case Study

Cavern City Tours

£145,000 Savings

The Challenge

The 2017 Rateable Value issued by the Valuation Office Agency was significantly higher than the 2010 Rateable Value and Altus Group was instructed by Cavern City Tours to reduce this valuation.

The Solution

The Cavern Club is quite unique in nature and so the property valuation for business rates is very subjective. Our Manchester based Business Rates Team successfully convinced the Valuation Office to review the percentage of trade figures applied to the calculation of the 2017 Rateable Value particularly in the trade categories of food and drink, merchandise, venue hire and ticket sales. After extensive negotiation, the Valuation Office agreed to reduce these percentages and this resulted in the generation of substantial savings for the club due to a large reduction in the Rateable Value.

Keyboard

Case Study

IAS Smarts

£113,675 Savings

The Challenge

Our client IAS Smarts occupied an office suite in a converted mill building in Bollington, Cheshire, which was subject to a lease renewal. The landlord proposed a rental increase from £84,506pa to £85,065pa for a 10 year term with a 5 year tenant’s break option. The service charge in the existing lease was fixed at 10% of the rent and the lease stated a floor area of 8,010 sq ft.  Altus Group was instructed to negotiate the best rent.

The Solution

Using our market knowledge and with the protected lease status , we negotiated a rental reduction to £77,400pa for a 10 year lease and a 5 year break option. We negotiated a landlord’s capital contribution of £36,000 and if the break option is not exercised a further contribution of £20,000 coupled with 3 months rent free. We successfully negotiated a complete revision of the previously fixed rate service charge clause to a fair apportionment based on the actual area of 7,744 sq ft  rather than the larger area stated in the lease and agreed that the service charge would be capped at 10% of the rent.

Inside office building

Case Study

The Hoxton Mix Ltd

£67,000 Savings

The Challenge

The instruction related to an office building constructed in 2000. The client took on the sixth and seventh floors in 2013. The property was assessed by the Valuation Office for the 2010 Rating List with a Rateable Value of £122,000. The areas of both floors were incorrect, there was lab space assessed on the seventh floor that was no longer in existence, lift access only went to the sixth floor and the tone of the building appeared excessive in relation to comparable properties nearby.

The Solution

We were able to correct the factual discrepancies identified by way of a joint inspection with a Valuation Officer. They agreed with all our points and the areas taken by the Valuation Office matched those taken on our own inspection. Once the areas and lack of lab space had been settled, the next step was using comparables to demonstrate to the Valuation Office that the seventh floor should be discounted for the lack of lift. Once all of this was settled the final stage was then persuading the Valuation Officer that the level of value within the building was excessive and that the basis of value should be reduced. The outcome resulted in the rateable value of the property being reduced from £122,000 to £90,000, producing savings for the clients over the 2010 rating list in excess of £67,000.

Lifts

Case Study

Vzaar

Break option achieved & cap to repair costs

The Challenge

Our client Vzaar occupied 3rd floor offices in Vauxhall, London, which were subject to a lease renewal. Vzaar required a further 5 year lease but also a tenant’s break option after the 3rd year. In addition, the lift had a history of expensive repairs shared equally between our client and the two other occupiers.

The Solution

We established a cost of £80,000 for a new lift and the landlord committed to replacing it within the first 6 months of the new lease. We persuaded the landlord to pay 50% of Vzaar’s share and to cap this at £10,000. We negotiated a 5 year lease and secured a tenant’s break option after 3 years with the first 6 months at half rent plus a further 4 months at half rent if the break option is not exercised.

Industrial building

Case Study

Altus Group Client

Professional strategic advice you can rely on.

The Challenge

Altus Group advises an industrial company who occupies 365,000 sq ft in 6 industrial buildings on a single estate. The buildings were constructed in the 1970’s and are now showing signs of deterioration. All leases expire in December 2023 and the company is seeking advice on their various options over the next 15 years.

The Solution

After meeting the client and gaining a full understanding of the issues, we submitted a report giving advice in respect of various options to include:
• Renew the existing leases
• Reconfigure the buildings to place under one roof
• Relocate to a modern facility of approximately 250,000 sq ft.
Our specialist Lease Consultancy Surveyor worked alongside our Agency Surveyor to cover all the options required. We arranged for a Building Surveyor to submit a report to provide the client with a cost estimate in relation to their dilapidations exposure.
The advice is ongoing.

Contact Us

Contact Us

Find out how we can help you save, contact our team today
0800 023 5310
property@altusgroup.com