Fresson & Tee Newsletter

Summer 2010

In this issue

Times, they are a changing

Keeping the customers satisfied

A starring role in Covent Garden

A cautionary tale: altered states

Waste not, want not

10 DECADES IN BUSINESS

Times, they are a changing

A cautionary tale:

With the Election done

and dusted and a historic

Conservative Liberal

Democrat coalition,

what impact is the new

government going to have

on the commercial

property market?

At this stage, it’s anyone’s guess, but there is, and there

will be for some time to come, an understandable feeling

of uncertainty and ‘wait and see’ across all industries.

Cuts, tax rises and increased job losses, certainly in the

public sector, are a given. But no-one yet knows where the

economy is heading or how interest rates will be affected.

At the moment, because interest rates are still low, there

will always be competition for alternative investments,

which ensures that property remains a viable proposition.

The good news is that capital prices have been on

the increase for 6 months, and have doubled in some

circumstances over the past 12 months, although rental

values continue to remain unstable.

Given anomalies in the rental market, it will always pay

dividends to consider your options well in advance. This

will ensure that plans can be structured properly and the

situation dealt with in a pragmatic manner, rather than in a

rush. If you make a mistake, it can cost your company for

years. Furthermore, for tenants with a lease that is coming

to an end in the next few months, it must be remembered

that three months is nowhere near enough time to find

a new location or to deal with the legal formalities which

normally take between 4-8 weeks.

This is where our long experience and expertise pays

dividends. So please, come and talk to us. At the very least

we can provide peace of mind although more often than

not, we add value either by direct savings for our tenant

clients or increasing revenue streams for our investor clients.

Today is always a very good time to act in order to review

your property situation. Tomorrow could be too late.

And while the summer sun may not yet be shining on the

London property market, as you’ll see from our featured

property in this issue, for buyers or companies looking to

lease in the capital, competitive options do still exist.

If the time is right for you, take advantage while you can.

David Shapiro

Director, Commercial Property

Tel: 020 7391 7100

E-mail: david.shapiro@fandt.com

GMS Estates Ltd, a client of Fresson & Tee has recently

purchased a 15,500 sq. ft refurbished period office building,

124-130 Southwark Street, SE1, from Land Securities.

Fresson & Tee has been instructed to manage this property,

dealing with the administration of service charges, as well

as taking charge of the services and facilities contracts to

ensure that the building runs efficiently.

“Property management here is less of a facilities service

and more of a customer service role. We’re striving for that

fine balance between viewing tenants as customers at all

times, while making sure that the building runs smoothly

and complies with the ever growing list of health, safety and

statutory regulations,” says Stevan Kelsey, Fresson & Tee’s

property management director.

Keeping the customers satisfied

Fresson & Tee is currently acting on a rent review dispute at an

11 unit industrial estate which is owned by a pension fund and

rented out in its entirety to a London borough. In turn, the

London borough sub-lets the units to individual sub tenants.

This dispute has developed into more than just an argument

about rent, and could be heading to court. The issue now mainly

relates to work carried out by The London borough’s sub-tenants,

without the head landlord’s consent.

Over a period of years, the sub-tenants constructed mezzanine

levels without the consent of either the London borough or

the head landlord (Fresson & Tee’s client), with the mezzanines

adding an extra 25% to the floor area.

Although overlooked by the landlord’s previous surveyors, at the

current rent review, Fresson & Tee noticed the discrepancy and

has acted on behalf of its client to try and increase the rent by an

equivalent 25%. The head tenant, the London borough, argues

that it didn’t need consent to make alterations. But the lease

clearly states that consent is required. The landlord has now taken

counsel’s advice, but ultimately, it may have to be decided by the

courts.

“Regardless of whether my client or the London borough wins

this case, this is a cautionary tale,” comments Fresson & Tee’s

commercial director David Shapiro. “Tenants aren’t free to do

continued on next page

A starring role in Covent Garden

Waste not – want not

Fresson & Tee is currently refurbishing several buildings in Wellington Street and Catherine Street, Covent Garden, on behalf of Shaftesbury PLC. These attractive period buildings are being comprehensively refurbished by Fresson & Tee’s project manager Colin Martin and will provide 9 flats converted from former offices and a pub, The Opera Tavern.

The buildings form part of the Opera Quarter estate, which Fresson & Tee has had a significant role in refurbishing, on behalf of property owners Shaftesbury PLC.

Cutting corners on property advice can be an expensive

business. “You need to plan your property ownership and

occupational factors in advance so that you don’t get caught

and end up paying more than you need to,” says Fresson &

Tee’s George McCullough.

Citing the case of a client whose leasehold property

interests had become a liability, costing the company over

£500,000 in lost revenue per annum, George also identified

an opposite scenario, highlighting the £500,000 windfall

bonus of a landlord client which was collected through a

dilapidation claim that it was not aware it was entitled to.

Many companies are their own property advisors, and are

not necessarily conversant with the tricks of the trade or the

legalities of ownership or occupation.

The dirty ‘F’ word, ‘fees’, can be off-putting, but as can be

seen in the two examples, it can pay dividends to consult an

expert in the field.

124–130 Southwark Street, SE1

what they like to a building without going through the correct

legal procedures, which means reading the lease and, in the

majority of instances, getting the landlord’s consent. Otherwise, it

can be a ‘money for nothing’ bonus for the landlord.”

Continues David: “Many, many tenants get caught out by this.

If the work is done with consent, generally, the landlord is not

allowed to charge rent for it. But if a tenant alters the property

they often only find out that they had no legal right to do this

when the landlord comes along and tries to profit from the

tenant’s work, which it could be entitled to do.

Tenants need to be mindful they can’t make

improvements or extend space without first

getting the consent of their landlord.”

You should call Fresson & Tee

on 020 7391 7100 if you require

advice regarding alterations to

your building.

News in brief

Ten reasons why you should contact Fresson & Tee:

1. Purchases and sales

2. Valuations

3. Building surveys

4. Design

5. Building conservation

6. Party walls

7. Project management

8. Rent reviews/leases

9. Dilapidations

10. Ten decades in business, ten decades of experience

Fresson & Tee has just leased a refurbished fourth floor of a well located City office building, 5 minutes from Moorgate tube station, on a short term lease on behalf of a banking client.

Several more floors are available to lease in the same building, from 2,058–10,357 sq.ft. If you require high quality office space in the City, or close to Moorgate, on a short term basis, call Fresson & Tee on 020 7391 7100.

Landlord or tenant, do you have a rent review or lease renewal either outstanding or on its way? If the answer is ‘yes’, call Fresson & Tee to see whether there is likely to be an increase.

Fresson & Tee has leased a fully fitted bar, Bar-B-Lo, in the heart of Bloomsbury. Despite a general slowdown in the property market, the property, which has a ‘cavern club’ feel has attracted considerable interest due to its scarcity factor, location and low rent. Bar-B-Lo has also attracted the largest number of visits to Fresson & Tee’s property website kingscrossproperties.co.uk. New managers are planning to shortly open as a lounge bar named New Bloomsbury Set.

£1 million has been slashed off the asking price of St. Mark’s Studios, Chillingworth Road, N7. The property, a former church, is now down to £2.6 million freehold or £10 per sq ft leasehold.

St Mark’s Studios, which has an attractive period facade, comprises a substantial Grade II listed building, arranged over ground and three upper floors. Available in its entirety or by the floor. It is suitable for a variety of uses, subject to planning permission.

St. Mark’s Studio, Chillingworth Road, N7

Find many more properties like these at kingscrossproperties.co.uk

Features1,500 SQ. FT – 15,834 SQ. FTPurchase or lease Fantastic façadeUnique opportunity

1,645 SQ. FT £45,000 PA

Quirky studio offices Newly refurbished

Minutes from Marylebone

1,700 SQ. FT £51,000 PA

Trendy open plan offices Discreet location

Secure bike parking

1,500 SQ. FT £31,500 PA

Opposite King’s Cross Flexible terms

Comfort cooling

1,250 SQ. FT £31,250 PA

Loft style office Good natural light

Adjacent to Battlebridge Basin

OFFICE SPACE TO LET: IN KENTON STREET, N7

OFFICE SPACE TO LET: LINHOPE STREET, NW1

OFFICE SPACE TO LET: STUDIO 10, TIGER HOUSE, BURTON STREET, WC1

OFFICE SPACE TO LET: BIRKENHEAD STREET, WC1

OFFICE SPACE TO LET: CRINNAN STREET, N1

1,077 SQ. FT £20,000 PA

Quiet central London location Open plan

Good natural light Great nearby facilities

Featured properties