The Challenge
Our Director Martin Black received an instruction from TK Maxx in relation to the rent review on their store at The Rushes shopping centre in Loughborough. The landlords were contesting an increase in rent, whereas our advice to the client was that no increase should apply. 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 same region, the matter was referred to an Independent Expert.
Key Points
- The rent review involved a large store comprising a total GIA of 26,921 sq ft over two trading levels, within an open precinct style shopping centre anchored by Tesco Extra.
- We provided the client, TK Maxx, with our advice in relation to the property’s rental value, and approached the landlord on the basis of a nil increase.
- In negotiations, the landlord’s agent persisted in seeking an increase, based on comparables taken from large stores in superior locations within the same region.
- The landlord was seeking an addition to reflect the service charge provisions which gave the hypothetical tenant the right to have a portion of the car park income off-set against the service charge expenditure.
- An application was made to RICS for the appointment of an Independent Expert, and a Calderbank issued at nil increase.
- When preparing his expert witness report, Martin was able to draw a wide range of comparables from other large stores suited to the discount-led sector of the retail market, across the same geographical region. He had been personally involved in several of the transactions relied upon in his expert witness report.
The Result
The matter proceeded to an Independent Expert referral. Following the submission of expert witness reports and points of reply, the Independent Expert decided in our client’s favour.
As a consequence of the Calderbank having been served, we were able to recover costs.
For more information please contact Martin Black on 020 7526 2010 or e-mail mblack@blackstanniland.com.