Rickmansworth High Street - handling rent review on behalf of a private landlord client with excellent results
blackstanniland received an instruction to handle a rent review on behalf of a private landlord client in relation to a Class A2 retail investment in High Street, Rickmansworth. The matter proceeded to an Expert determination, as a consequence of the respective parties’ difference in opinion as to the appropriate Zone A rate, as well as the appropriate rate to be applied to the self-contained office accommodation.
- Negotiations were instigated with the tenant’s by quoting a rental of £52,000 pa compared to the rent passing of £40,600 pa.
- To begin with, since there was little in the way of recent evidence, and following the tenant’s insistence that a nil increase was due, we issued a Calderbank offer at £42,000 pa with a view to achieving some form of increase.
- Throughout negotiations, we constantly monitored the evidence coming through, in relation to both retail units and self-contained office accommodation above shops in the High Street. We rejected the tenant’s agent’s argument that a discount should be applied to reflect the assumed term.
- Some new evidence was created further to two rent review settlements, which assisted our case in respect of both the Zone A rate and the valuation of the self-contained office accommodation. For this reason, we obtained client’s instructions to withdraw our previous Calderbank, and issue a second Calderbank at the increased level of £44,000 pa.
- Shortly afterwards, some new further open market evidence was created in the form of a letting to a major multiple, which assisted our case in terms of the appropriate Zone A rate. For this reason, we obtained our client’s instructions to withdraw our second Calderbank and issue the tenant’s with a final protective Calderbank at the higher level of £46,000 pa.
The Independent Expert made his determination at the level of £45,300 pa, thereby within 1.5% of our final protective Calderbank offer. Since the parties were unable to agree on how costs were to be apportioned, the parties made representations to the Expert on the matter of costs. The Expert took into account our argument that this was a clear instance of a “near miss”, and made his determination in our client’s favour. The result was that the tenant’s were directed to pay all of the Expert’s costs, which was the maximum which could be awarded in accordance with the lease terms.
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