3. Introduction
Expense Reduction Analysts Property offers a dedicated range of
services specifically tailored to occupiers. We have no allegiance
to landlords and developers and can therefore be confident that
other competing interests do not influence our efforts.
Conventional property advice often focuses property costs and exposure match your
on individual services that do not necessarily business needs. As we are part of Expense
tie into a coordinated approach and do not Reduction Analysts, ongoing property costs
always match the Client’s expectations. is a constant driver of our service whether
We will, where appropriate and if requested, we are handling business rates, dilapidations,
always refer back to how the subject rent reviews or acquisitions.
activities reflect the business objectives,
not just in the short-term but also over Furthermore, this carries through to our fee
the medium to long-term. bases which will always be offered to you
including a results basis. This cost focused
Our Property Team maintains a focus on best approach is the ethos of the network and
value and this can be demonstrated through clearly demonstrates that, together, we
simple comparison tools to ensure your can achieve significant savings.
Introduction 3
4. Strategic Property
Costs Review
Rationalise Annual Property Costs
In the current market you might well be Our initial analysis will look at:
affected by economic uncertainty and
therefore you may wish to consider • Group turnover/profitability
reducing your property costs. • Operating costs
• Floor space
Our property experts can undertake a review • Headcount
of your properties to identify opportunities to • Acquisition criteria
reduce ongoing costs through, for example, • Lease terms/book value
identifying and disposing of surplus space, • Market values
advising on new working practices that • Void space – whole buildings
reduce the need for space, renegotiating or within buildings
leases or mitigating dilapidations liabilities.
Following this scoping review, we may
uncover specific action points for you that
can demonstrate tangible savings for your
company. We can work from your current
expenditure levels to produce benchmark
prices to verify the results.
4 Strategic Property Costs Review
5. This data could then be used to We will then have specific benchmarks
compare performance across the which can be used to compare sites within
portfolio to identify: a single company and also overall costs
compared to industry standards. These
• Performance measures including costs would then guide many future
cost/employee/turnover per square foot decision making strategies and could
• Effectiveness of site acquisition and be backed up by further qualitative
disposal strategy property analysis, when needed.
• Exposure by site/store/portfolio
• Trouble spots
• Relocation/closure options – after liaising
with local managers
• Accuracy of provisions
• Effectiveness of disposal programme –
restructuring
• Individual site/store analysis
• Head office costs
Strategic Property Costs Review 5
6. Business Rates
Save £££’s by dramatically reducing your business rates.
All fees are charged on a ‘no saving, no fee’ basis, so if
there is no rates saving, there would be no charge.
The business rates that a company pays What process would we follow?
can be reduced through an appeals process
and savings are possible over a five-year In order to focus on those appeals that
period. The average reduction in rating create a stronger opportunity for savings,
assessments by our specialist team is 14%. we initially correspond with our clients
to gather key information about their
The current rating revaluation is effective property and any proposed changes.
from April 2005 and definite opportunities
exist to reduce business rates up to 2010 and An inspection is usually then undertaken
beyond, when a further revaluation takes followed by recommendations on whether
place. The revaluation reflects movements in to appeal. The matter will result in
the property market and the rates bill you negotiations with the Valuation Office,
receive from your Local Authority may have hopefully achieving savings. Following
been rising above inflation to take account any settlement, we will liaise with the
of these changes. However, a proposal can be Local Authority to ensure the saving is
lodged against your rateable value and any refunded correctly to you.
reduction could benefit you over the whole
five-year period of the revaluation.
6 Business Rates
7. Tower chart
Reach for the low hanging fruit!
Additional savings opportunities exist where accommodation that previously may
physical changes exist in the locality that have had reduced or zero rates but now
have a negative impact on a rateable value. have a full charge. Each property would
Clients may be able to secure a temporary be considered differently and pro-actively
reduction in the rateable value up to 20%! but there is still excellent scope for
savings here.
There may also be further opportunities
to reduce rates liabilities for empty
Business Rates 7
8. Rent Reviews &
Lease Renewals
Are you paying over the odds
for your rent?
When a landlord quotes a revised figure at Our service comprises:
rent review or for a new lease, the quoted
rent can be challenged, based on a detailed • Undertaking a detailed inspection of the
understanding of the lease, together with premises, together with a full and
market evidence. thorough reading of the lease provisions
• Analysis of the rental evidence and details
An adviser should be involved at an early of any rent-free incentives provided
stage to provide the correct advice, including • Meeting the other appointed Surveyor
checks for any ‘time of the essence’ clauses. to compare lease findings, details of the
property and comparable evidence
In undertaking a rent review, it is extremely • Negotiations
important to initially value the covenants • Recommendation reports to the Client
contained in the lease and relate those to regarding the level of rent that is
comparable evidence. applicable having compared the evidence
put forward by both parties, leading
eventually to an agreed rent, failing that,
reference to independent Third Party
mediation.
We welcome the opportunity to discuss your
requirements in more detail and look forward
to arranging a meeting to showcase our
service, expertise and our commitment
to meeting your needs.
8 Rent Reviews & Lease Renewals
9. Interested?
What you should do next?
We will require a copy of the lease and any You can rest assured that we offer expertise,
rent review memoranda if appropriate. up-to-date market knowledge and a genuine
Having discussed the situation, we will enthusiasm for communicating with our
create a brief audit report of our advice. clients.
We will then provide initial advice on our
opinion of rental value. Should your lease be due to end, there are
also opportunities to renegotiate the terms
and possibly a rent reduction along with any
other more favourable terms that are re-
quired.
Rent Reviews & Lease Renewals 9
10. Dilapidations
Lease coming to an end?
Unsure of your responsibilities?
Typically, a tenant is responsible for the Our service includes:
upkeep of their property during the period
of their occupation. Upon expiry of a lease, • Understanding how to interpret the
the landlord can instruct a surveyor to repair clauses in your lease
establish whether there are any breaches • Determine whether the repairs are
of these responsibilities and demand required under the terms of your lease
payment for losses incurred. • Consider the impact of any tenants
improvements
It is possible through an understanding of • Calculating the cost of repairing
the client’s lease, the property and property the breaches
law to query the amount of the claim. This • Evaluate what impact the current
can enable us to set about reducing this condition of the property has on its
claim and ultimately saving money for re-letting capability
the occupier. • Respond to the landlord or the surveyor
on your behalf
A Landlord’s claim will provide a full • Negotiate potential savings with the
breakdown of the alleged breaches, the landlord or the surveyor
required repair works, the cost of these
repairs and associated fees. On some
occasions, there may also be an element
for loss of rent, as the landlord will allege
that the condition of the property has
harmed its re-letting capability.
10 Dilapidations
11. Success Story
National Client We were able to review all the alleged
Location: Weston Super Mare breaches and review if the required repairs
Landlord’s surveyors prepared a Schedule and redecoration were reasonable. In many
of Dilapidation and Wants of Repair and cases we were able to establish elements
Redecoration amounting to a total claim that were unreasonable.
of £56,500.
As property specialists, we undertook a
We initiated our involvement with a review looking at whether the alleged
thorough review of the lease and also breaches would actually damage the
arranged a joint site inspection with the potential letting of the client’s former
opposing surveyor. accommodation. If we could argue the
space would let just as readily, it could
We were able to identify parts of the claim be possible to effectively dispute most
that our client was not liable for, as they of the claim.
were outside of their leased area. It was
also apparent that parts of the property Finally, we evaluated the Landlord’s
were in poor condition and it would be surveyors fees and considered if these were
tantamount to an improvement to incur deemed to be excessive. We successfully
this expense. negotiated a reduction in the claim from
£56,500 to £28,000, effectively halving
the amount.
Dilapidations 11
12. Acquisitions
How shrewd are your Expense Reduction Analysts
property negotiations? Property?
Acting nationally on many property We have an extensive knowledge of the
acquisitions, we tap into the latest deals agency market, courtesy of our corporate
meaning that we are perfectly positioned property role to a national client base.
to offer advice on rent and pricing whilst
negotiating the best deal for the client. Furthermore, the knowledge we acquire
about our client’s business, together with
We ensure that the proposed terms are fair our knowledge of the property market,
and protect the client’s interests now and provides us with the best opportunity
in the future. to identify properties that suit your
requirements.
We don’t waste your time offering
numerous properties that simply
do not match your needs.
12 Acquisitions
13. 10-Stage Acquisition
Process
Expense Reduction Analysts’ 10 Stages to Successful
Property Acquisition
10 Exchange and 1 Confirm the
Complete Acquisition Criteria
9 Consider Related 2 Summarise all
Property Services Available Properties
8 Further Inspection 3 Create a Short-List
of Property of Properties to
View
7 Agree Heads of 4 Conduct
Terms Inspections
6 Negotiations on 5 Short to Long-
Selected Options Term Impact
10-Stage Acquisition Process 13
14. 10-Stage Acquisition
Process
1 Confirm the Acquisition criteria. 4 Undertaking, either with you or
Structuring a brief to identify exactly independently, a thorough inspection
what you require, including location, of the options, creating a precise
size, configuration, quality, car parking, comment on suitability.
accessibility and cost parameters.
5 After inspecting your selected list of
2 Creating a full and thorough list of all properties, we will comment not only
possibilities that meet the above brief, on the short-term, but also observe
including collation of brochures and the impact over the long-term such as
plans of all options. planning issues, future development
opportunities and the impact of lease
3 Discussing the list of possibilities with obligations.
yourselves, providing direct comments
where suitable, with a view to creating 6 Agree the acquisition of a selected
a shortlist of best options. Once this option, whilst at the same time
has been achieved, then the process of ensuring that the other suitable
acquisition can proceed. options are kept live in reserve, so as
not to give the preferred option any
advantage.
14 10-Stage Acquisition Process
15. 7 Agree detailed Heads of Terms for an Our involvement will always keep your
acquisition (or renewal) including interests as the foremost requirement, and
demise, lease length/tenure, hopefully will keep your time commitment
rental/price, repairing covenants, to a minimum. The importance therefore in
service charge levels, legal costs and structuring an accurate brief that we can all
any incentives available. work to cannot be stressed enough and our
work will be undertaken swiftly and with
8 Once Heads of Terms are agreed, to minimum fuss for you.
undertake a final inspection of the
property and to verify floor areas etc. Our fees are typically charged on a
percentage of the acquisition price or
9 At this stage to offer, if required, other rental amount, with no fee payable if
services such as Rating, Building a suitable property is not identified.
Surveying, schedule of Conditions etc.
10 Proceed to an acquisition of the
selected options alongside your legal
advisors to ensure that any legal
agreement properly reflects the
negotiated terms.
10-Stage Acquisition Process 15
16. Corporate Property Advice
Encompasses all Property Services
Profit through property What is involved?
Our aim is to reduce the medium term Through an experienced and focused
solution that is inevitably associated with approach, we will initially gather an
commercial property, to a managed process appreciation of your company, your current
that allows property to perform as an asset. property portfolio and costs relative to your
company turnover.
Strategic property decisions need to be at
the forefront of your business to We believe that it is important for us to
improve your company performance. understand if your company occupies large
properties on long leaseholds or if you
In line with this, it is ideal to then create a require short-term leases based on a
corporate property strategy to coordinate localised work contract. Alternatively,
the separate elements that are involved in you may prefer to trial new locations first
the property process. We know that property and require lease flexibility, or your
decisions are generally a reactive response business may demand a substantial amount
to a particular request or event and they of alterations to a property before you can
may not be part of an organised plan. commence trading.
Following our initial appreciation of your
long-term business and property goals,
we will create a strategy based on your
needs, providing specific advice using
our expertise and understanding.
16 Corporate Property Advice
17. The Strategy Benefits
• Read and understand all tenure • Achieve Client objectives
• Create a terrier of data • Create a better property understanding
• Devise an acquisition/disposal list and control of Clients property
• Budget for rent reviews • Meet with Client on regular basis
• Create a database of inspections • Appoint and manage local advisers
and properties • Charge market fees for work types
• Record for lease renewals, critical • Enjoy a full and rewarding client/advisor
break dates, repairing frequencies, etc. relationship that benefits all parties
• Save Client money/budget for costs
The Actions
How is this different to
• Assess and budget for dilapidations conventional advice?
• Help local branches deal with
Landlords/Tenants All too often companies acquire and
• Carry out rent reviews/lease renewals dispose of property in an ad-hoc fashion,
• Carry out acquisitions/disposals which places unnecessary time pressures
• Advise and challenge business rating on the personnel involved and is also likely
assessments to cost your company money, either today
• Planning advice for own use and/or or in a few years time or at the expiration
higher value uses of a lease. Corporate advice applies a
• Appraisals and valuations planned strategy to your decision making,
• Bring forward pro-active ensuring fewer surprises and hence saving
recommendations you money.
• Act as an equivalent in-house
property team
Services 17
18. How will it benefit you? How are fees charged?
Your company will notice improved These can be charged on a fee basis that
performance, as you will have the correct best suits your company. There would
property structure in place to support your normally be a base charge and then a
operations. percentage fee is usually charged, for
example on the acquisition costs or
In addition, you will experience cost based on cost savings.
savings as this planned and preventative
action avoids surplus space, reduces Expense Reduction Analysts services are
dilapidations costs and avoids excessive undertaken by consultants whose firms
occupancy costs of rent, business rates are members of the Royal Institution of
and service charges, Chartered Surveyors (RICS). RICS is one
of the most respected organisations for
property professionals. As members they
are highly experienced, chartered
professionals offering impartial,
specialist advice.
18 Services
19. The Expense Reduction Analysts Property Team can
achieve, on average, savings of 30% for its clients.
To find out how you can benefit from this service
contact your local specialist.
20. find extra profit
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