Commercial property owners across the UK are being warned to be on the look-out for potential squatters in their empty or infrequently used premises, following a change in the law, according to Peter Knight, director of Manchester-based commercial property managers Knight Site Solutions.

Over the last month squatting in a residential property has become a criminal act and this has already seen some squatters target other types of property such as vacant business space for a place to call ‘home’.

Peter Knight, director of Manchester-based commercial property managers Knight Site Solutions said: “The advice being given by groups which support squatting now indicates that they are looking to actively target commercial property and their removals from it remains primarily a civil matter and therefore the responsibility of the property owner, who will need to take legal action to recover the property.

“This is both time consuming and costly to do and whilst the intention behind the new law was to protect home owners, it has pushed the problem towards the business community and there is in many areas a lot of empty commercial property around for squatters to choose from.”

Peter cited a potential scenario of an empty retail unit or public house with a flat above it. Squatters could legally claim not to be living in the residential part of the property and the Police would be completely powerless to intervene.

The Ministry of Justice has insisted it will seek to improve the current civil remedies of such cases as well as the enforcement of existing criminal offences made by squatters. As yet, no timescale has been placed on this and landlords are therefore urged to remain vigilant in the coming months.

Peter Knight can be contacted via www.knightss.co.uk

Commercial service charges remain a complex and highly topical issue in commercial property. There is a series of problems frequently observed in property management relating to how service charges are managed.

Some of the issues, such as poor compliance with the RICS Code, have recently been addressed at the British Council for Shopping Centres Conference (BCSC). And, further raising the profile of the issues a Service Charge Summit is expected to be staged by the RICS in November this year to address some of the areas of conflict pertinent to service charges.

Peter Knight, director of Manchester-based commercial property managers Knight Site Solutions highlights the issues that are frequently observed in practice relating to the following areas.

Accounting practices. Confusion can be avoided if the service charge reconciliation statement for the year is prepared on an accruals basis. Unfortunately, practice (as well as our research into the subject) suggests that a lot of companies use the cash basis for recording service charge monies. Given the level of spending at some locations, as well as, the nature of accruals accounting, a proper balance sheet must be put together as well. This becomes even more important in the event of sinking fund or utilities deposit collection.

Procurement. Services contracts are often centrally procured by the landlord or the managing agent, which may lead to inappropriate levels of services at a particular building. Furthermore, the costs incurred by the occupiers may be non-recoverable under the terms of the contract, which can result in overcharging.

Management fee. Not all management contracts provide a detailed description of the activities carried out by the management team, which creates ambiguity. Even less often, management contracts specify time required to perform the tasks and respective hourly rates. Hence, a lack of transparency and a ground for a dispute. On the positive side, the industry is shifting from percentage fees to fixed fees, which represents a much more sensible approach to pricing.

Lack of dialogue. As in any sector, insufficient amount of communication creates problems. Hardly ever an appropriate forum is convened to agree on the level of services, KPIs and the budget for the property. We believe that such dialogues between the landlord, and tenants, and the managing agent are paramount to achieve high operation qualities of the property as well as satisfied customers.

These are of course only some areas which require stakeholders’ attention. However, we believe that if the above aspects of property management are sorted out at a higher level, a lot of technical issues can be resolved much easier.

Lack of legislation and separation between the customer and the consumer (for many properties, the managing agent provides its services to the landlords, while the tenants represent the end user or consumer) reduce the incentive to comply with best practice and continuously improve their services for many providers. We believe that a ‘best practice’ approach to service charge management will not only help to avoid disputes (and quite often unnecessary legal costs), but also improve property performance.

Peter Knight can be contacted via www.knightss.co.uk

Choosing to lease new business premises is a significant step as your rent generally represents a significant chunk of your monthly overheads. It is important you are sufficiently aware of the process of securing commercial property for your firm. Before signing on the dotted line you must be 100 per cent sure that the new premises are right for your current and future needs to enable your business to flourish and expand. It is said that two thirds of all new businesses fail within the first three years, so beware of the length of your lease and the legal implications of terminating it.

Peter Knight, director of Manchester-based commercial property managers Knight Site Solutions said: “There are a number of important differences between renting residential property and commercial property. In fact commercial tenants have far less protection than residential tenants, with any lease agreed effectively binding on you and your organisation. Securing a commercial lease is open to negotiation on almost every level, so ensure that you have legal advice close at hand. Take a qualified surveyor or solicitor out for a cup of coffee and allow them to interpret the terms of your commercial lease in layman’s terms.”

With any new business plan it is advised to consider introducing a break clause which gives you a much needed safety net in the event that things don’t go as planned. A break clause allows you to terminate a commercial lease after a certain time period whilst having the option to remain in the property.

Peter Continued: “A property management service can take an overall look at the market and perhaps identify a site which is less risky for the business, more flexible and ultimately more cost effective until the economy recovers and business improves. As experienced property consultants, they have the right network in place to source premises which may not have made the open market yet or will be in a better position to negotiate a better deal on those that are.”

Commercial property management companies can navigate complicated leases so you know exactly what you’re letting yourself in for. As well as explaining the hidden costs such as the likely set up, land remediation and building running costs and ultimately the exit liability which can be hidden in legal jargon.

When negotiating the length of your commercial lease it is widely accepted that the longer term you commit to the lower the rent you will pay. You should also be prepared to factor in a rent review after a set period of time as rent can fluctuate depending on the prosperity and demand of your location.

Peter Knight can be contacted via www.knightss.co.uk

The vast majority of surveyors believe that charges levied against empty commercial properties are ‘significantly detrimental’ to the recovery of the nation’s local economies, a report from the Royal Institution of Chartered Surveyors (RICS) found.

The new survey from RICS found that 90 per cent of surveyors claimed that extortionate Empty Property Rates (EPR) are hampering local economic recovery in the UK.

75 per cent of those who responded also believed that the rental value of retail properties would decrease as a direct result of EPR.

Nine tenths (88 per cent) also considered EPR to be a significant deterrent for the speculative building of commercial property.

Jonathan Cornes, Building Surveyor from Jonathan Cornes Associates said: “The charges faced by property owners are quite simply crippling the high street and preventing businesses of all types from achieving financial stability. It is clear that in this difficult economic climate, businesses need all the help they can get.

“We would like to see the government take the initiative in the forthcoming Autumn Statement and offer property owners a longer exemption period. This would allow commercial landlords some much needed breathing space and contribute towards getting the business sector moving again”.

Owners of commercial premises, including both offices and high street shops, are not required to pay business tax for three months after they are vacated. This period is extended to six months for warehouses and other industrial properties.

However, beyond this period, EPR are applicable at a full rate, leaving many businesses with a hefty tax bill which they cannot fund.

68 per cent of respondents also claimed that commercial property floor space was vacant for periods in excess of six months, meaning that owners face unmanageable taxes when their businesses are at their most stretched.

Over half of those surveyed said that they believe such factors can lead to property owners demolishing their business premises rather than face the tax.

Rates collected from taxpayers are initially passed to central Government before being redistributed back to Local Authorities as part of the Local Government Finance Settlement. These funds are then used towards paying for local services.

RICS has called for the Government to extend the exemption period for commercial property owners in its forthcoming Autumn Statement, allowing premises owners without tenants to avoid EPR for six, rather than three, months.

It has also asked for industrial property owners to be granted an extended 12 month grace period.

Property Aspects Magazine appreciates the expertise and advice from Jonathan Cornes in the compilation of this article

In the current economic climate, every penny saved truly is a penny earned, and the director of Lancashire-based telecoms company TechAdvance has been embracing this mantra to help businesses get cost-effective. Ian Hilton says all throughout the business sector, companies can save nearly 30% by simply reducing operating costs.

Speaking frankly, Ian said: “We are still finding opportunities to reduce operating costs for businesses by an average of 29.7% by conducting an independent cost analysis of these services and comparing current bills against rates we can recommend. Growth is being driven through faster, more reliable internet connectivity options, and applications that deliver integration with mobile devices and the desktop, making communication easier.”

Ian then expanded on internet connectivity, which he sees as “another key area of focus.”

“Looking at the costs and speeds of current connections, and then considering upgrades to newer broadband technologies or Ethernet, first mile can prove very beneficial. Everybody wants faster and in today’s market this doesn’t always mean more expensive.”

Property Aspects recently reported on Ian’s company Tech Advance saving retailer Home Bargains several thousands of pounds over the last ten years by consolidating their telecoms early. Home Bargains has grown from 15 branches to 280 with an expansion to 500 properties on the way.

What was also recently reported was that they have hit sales of £900 million.

Being a telecoms expert, we had to ask Ian the big question: what are the biggest mistakes your average business makes in managing their telecoms technology?

Ian responded: “Put simply, too many companies manage this part of their business in house, usually in IT, finance, or sometimes both. In smaller companies the owner-slash-managers do the same“.

“Companies spend too much time considering services from too many providers and often lack a structured approach with expert input and broad industry knowledge. This can lead to slow decisions and paying over the odds”.

Property Aspects appreciates the contribution to this article from Ian Hilton of TechAdvance who has worked in telecommunications for 22 years. For more information, contact Ian via Tel: 0845 389 2311 or E-Mail: ihilton@techadvance.co.uk

Property Experts are calling for a reduction in VAT on home repairs, maintenance and improvement work. It comes as the UK government is about to lift the VAT exemption on listed buildings that is set to put Britain’s 400,000 listed properties under threat.

From 01 October 2012, VAT on all alteration and restoration work to listed buildings will be introduced at 20%. The move means owners of listed buildings will face spiralling costs just to maintain their property, whilst investors will be deterred from restoring empty listed properties.

As Chartered Building Surveyor Jonathan Cornes explains “Preservation of a listed building involves dedication in time and money due to the more expensive methods and materials involved. Much of the property industry, including RICS, has spoken out against the move which could mean essential works will no longer be financially viable, leaving Britain’s listed properties to fall into disrepair”.

The lack of funds will also impact negatively on specialist repair and maintenance companies operating in the construction sector. RICS, as part of the ‘Cut the VAT Coalition’, is therefore calling on government to reduce the VAT to 5% across all home repairs maintenance and improvement.

This would not only have a far smaller impact on owners of listed properties, but also free up finance for non listed property owners to pay for residential works.

“The government has missed a golden opportunity to create a level playing field on all residential works. Reducing the VAT rate to 5% across the board would have helped those who cannot afford vital repairs to their homes. In addition, the reduced costs would prompt investment and bring thousands of empty properties back into use”, said Peter Bolton King, global residential director at RICS. ‘Crucially, the construction sector would also be given a necessary boost. Research shows that VAT at 5% on all residential work would create 26,560 jobs in the construction sector with a total economic stimulus of around £1.7 billion in 2012 alone’, he added.

Stuart Thornhill, Partner at Jonathan Cornes Associates, Chartered Building Surveyors said; “What we should be doing is re-using existing buildings, turning chapels into homes and warehouses into restaurants, for example, but having to pay more tax is going to make that more difficult and is counter-intuitive to what the Government is trying to do.”

“The Government is trying to stimulate building, but this is pulling the other lever by making it more difficult for developers. The knock-on effect is that we are not going to bring these buildings back, they are going to fall into a further state of disrepair and we will lose the cultural and historical heritage that makes our landscape.”

“The Government is trying to stimulate building, but this is pulling the other lever by making it more difficult for developers.

Owners of listed buildings who received Listed Building Consent before 21 March 2012 will be exempt from the imposition of VAT until September 2015.

Property Aspects Magazine appreciates the contribution to this article from Jonathan Cornes Associates.

To some extent, the location of your office can greatly stimulate or dampen your business. Situate your office in a prime location with lots of foot traffic, and you will have marked your business for success. Pick the wrong spot for it, and it could have a detrimental effect on your business.

If you think your business needs a new lease of life. Have you considered relocating to a city centre location? One of the main factors a professional company must consider when choosing a location is accessibility to their targeted clientele including issues of proximity to client offices, accessibility via public transportation, and parking facilities.

Looking for a Manchester City Centre Office Space?

Gregs Building is in an ideal location in the heart of Manchester’s traditional prime office core on an island site with frontages to Booth Street, Chancery Place, Pall Mall and Tib Lane. It’s easy to get to and right in the middle of the busy, buzzing city centre.

The upper floors are accessed directly off Booth Street via an impressive recently refurbished ground floor entrance hall from where a 6 person passenger lift and principal staircase serve all floors. The office accommodation, which is air-conditioned, benefits from natural light on all four elevations and comprises mainly open plan accommodation with male and female toilets provided within each demise. The 5th floor provides a large decked balcony with excellent city views, Ideal for meetings or hosting client functions.

Paul Willan from Greg’s Properties said “We are delighted to be able to offer this fantastic Prime City Centre, Boutique Office accommodation to professional companies who are looking to relocate and really be in the heart of Manchester City Centre.

He continued: “Gregs Buildings is an excellent example of mid-19th century architecture offering exciting development opportunities. The city centre location really is attracting huge amounts of interest from a wide selection of professional companies.

So if you would like to give your business a new lease of life please check out this video and contact the agents whose details appear at the end of the short film clip.

When trying to be cost-effective in relocation and growth, telecoms aren’t usually first on the list of considerations.

However Lancashire based telecoms company TechAdvance have helped save growing discount retail chain Home Bargains several thousands of pounds over the last ten years, by consolidating their telephone systems and project managing new installations.

TechAdvance first began work with Home Bargains in 2002, when they were relocating their head office to Axis Business Park, Liverpool. The Preston based firm project managed the entire process, which included installing the cabling infrastructure and consulting with other firms during installation.

Following the move, Tech Advance advised on telecoms systems in stores and over past decade have been ever-present during Home Bargains’ expansion from 15 branches to 280. The firm acted as an interface between Home Bargains and BT to ensure that installations were completed on time to a tight turnaround, which ensured branches opened on schedule, thus saving Home Bargains thousands of pounds in potential retail income.

Insider Media Limited recently reported that Home Bargains recently hit sales of £900 million and were planning on expanding to 500 stores with 12,000 staff in the next five years. In the annual report, TJ Morris’ directors claimed new outlets was one of the main drivers behind the solid results.

TechAdvance continues to provide services for Home Bargains to this day, making the process of opening new branches or relocating more manageable and cost-effective. Most recently the Preston company has overseen the installation of a broadband security feed, that allows CCTV from all branches to be streamed back to their head office live.

Speaking to Graeme McLoughlin, CFO of Home Bargains about Tech Advance’s impact on their growth, he proclaimed, “TechAdvance has provided superb expert advice and project management throughout the last 10 years. They have become a valuable and trusted extension to our business, taking care of the infrastructure and allowing us to focus on core business objectives and growth.

Convergence solutions and pricing moves at such a pace it is one of few areas we outsource to ensure knowledge and expertise is current. It is essential, however, to have a partner in this process that are transparent, trustworthy and capable of tacking ownership of value adding projects”.

Ian Hilton, director of Tech Advance, insists all they have done is part of the service they provide as standard. He stated, “There have been many instances where Home Bargains have been able to reduce operating costs year on year through our input, whilst maintaining significant growth. Plus it’s always a win to help a new store open and start trading on time when timescales are so tight.”

Ian continues, “Many companies are still spending too much time managing telecoms in-house via IT or finance management staff. They are busy and miss out on savings whilst taking too long to decide what to do that’s best for their business.”

Property Aspects appreciates the contribution to this article from Ian Hilton of TechAdvance who has worked in telecommunications for 22 years. For more information, contact Ian via Tel: 0845 389 2311 or E-Mail: ihilton@techadvance.co.uk

Jill Jones, Director of Environmental Consultants Peak Associates said; explained that many companies are spending more than they should on water.

It is always worth having a closer look into the your water usage costs and see how it is affecting your bottom line,” she said. “In fact one company assessment we have recently conducted found one of their sites were paying as much as £8.36 per cubic metre for their water”.

She added: “Like most companies, they didn’t know how to tackle this, so outsourced it for Peak Associates to investigate. We investigated the sites for them and helped to come up with ways to save water as well as finding the cheapest places to buy water”.

“Take control of your water usage yourself, don’t let the water companies do it for you,” Jill urged. “Every drop is precious not just to life but to your bottom line.”

There are many ways to become more water efficient. The first was to educate colleagues and employees to not leave taps running and the importance of reporting plumbing problems to be fixed. Second was to boost maintenance. And the third part of the strategy was to take ownership of the water budget.

Jill Jones, Director at Environmental Consultants Peak Associates said “The water industry has been theoretically deregulated in England and Wales, in reality there are no alternative suppliers to the regional water companies, and therefore it is impossible to switch suppliers to obtain better terms, unlike the other utilities“.

“The alternative is for businesses to look for measurable savings in their water charges. This can be done by looking closely at bills, reducing water consumption and looking at surface water charges.”

We thank Peak Associates for their contribution to this article. Contact Peak Associates by Telephone: 01925 491011 or Email: northwest@peak-associates.com Website: www.peak-associates.com

Property Aspects Magazine recently spoke with Paul Willan of Greg’s Properties, who, despite the general business climate, believes they still are.

“Many Companies across the UK remain keen to operate in the City Centre and there has certainly been an increase in demand over the last year or so, with smaller businesses expanding”, Said Paul.

Even during the recession and subsequent Euro crisis, he says that demand in the Manchester City Centre has remained “robust”. The reason, as you may guess, is the many benefits of being associated with a City Centre address as well as its accessibility.

“The key issue is the relative ease of access for staff from most areas around Manchester and therefore the ease of access to significant client customers,” he said. Of course operating in city centre locations can sometimes be costly and is not without its challenges”. Paul added: “On the cost side, it is not just rent but also property taxes which will impact,” he said. “Cost of space is a factor and we have the same issues as conventional tenants, as we are leasing buildings. However we can provide landlords with flexibility and help them to maximise revenue”.

Manchester is a dynamic and thriving city in the heart of the Northwest. It is a city which is enjoying economic growth.

One example of a fabulous city centre location which is at the centre of a thriving business district is Gregs Building. This short clip shows the Grade II listed city centre property in all its glory, also highlights some of the city’s commercial property landscape, the social aspects of business life in the city centre and the transport infrastructure that provide a massive benefit for businesses located in the centre of Manchester.