Crouch End - secured 'nil increase' rent review for client's Whole Foods
Our Director Martin Black received an instruction from Whole Foods in relation to the rent review on their premises at Crouch End, in north London. The landlord’s were contesting a significant increase in the rent, whereas Martin Black’s advice to the client was that the premises were significantly overrented. Arising from the respective parties difference in opinion as to the quality of the property’s location compared to other large store comparables in the immediate vicinity, the matter proceeded to an Expert determination.
- Martin provided Whole Foods with pro-active advice in relation to the property’s rental value, and made a pre-emptive approach to the landlord on the basis of a nil increase.
- In negotiations, the landlord’s agent sought a significant increase, based on the evidence created by a nearby Budgens food store, which is superior arising from:
- It’s more prominent position facing onto The Broadway.
- The established retail location, in contrast to the subject property’s location within a residential side street, with no established retail offer.
- It’s superior configuration and specification compared to that of the subject property.
- It’s demised car parking spaces to the rear, whereas the subject property has no parking.
- It’s proper loading facilities, in contrast to the subject property which has no dedicated servicing, and parking restrictions to the front of the store.
- It’s permitted planning use to include Sunday trading from the store, whereas the subject property has no consents to trade on a Sunday.
- We advised our client that an application should be made to the RICS for the appointment of an Independent Expert.
- Due to the specialist nature of the subject property’s location, which is in a residential side street with no established retail offer, and the subsequent lack of meaningful comparables, it was necessary to draw a wide range of comparables from other large stores of a similar overall size of circa 8,300 sq ft and in similar off pitch locations, across the greater London area.
- A crucial factor in this case, which we were able to bring fully to the Expert’s attention at third party, was the obvious lack of requirements in the market for premises of this type in that specific location. In our representations to the Expert, we made full reference to the property’s extensive marketing history which included information regarding surrender discussions.
The Expert made his unreasoned Determination based on a rental level 20% below the current rent passing, ie a nil increase. As the lease did not give the Expert any discretion over costs, it had not been possible to issue a Calderbank, and each party subsequently was responsible for it’s own costs.
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