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ISSUE 15 APRIL 2020 FGBUR NETT.CO.UK

INSIDE THIS ISSUE Investment into Leisure Facilities can Transform Communities‌ A West End Renaissance Location, Location, Location The Non-Domestic Rates (Scotland) Bill – Are You Ready?

Welcome to the latest edition of Property Matters. In this edition we feature a range of articles including a thought provoking piece suggesting a renaissance in the West End of Aberdeen office market; an update on the Non-Domestic Rates (Scotland) Bill together with informative articles from our Building Consultancy, Valuation, Property Management, and Agency teams. Our guest contributor this edition is Alistair Robertson, Managing Director of Sport Aberdeen. His article provides an insight to the work of Sport Aberdeen, the award

winning charity which was established in 2010 with the aim of creating opportunities, inspiring people and changing lives through sport and physical activity. Sport Aberdeen was formed with the belief that everyone is entitled to access quality provision of sport and activity opportunities. In his article, Alistair gives an example of a project that transformed not only the leisure facilities of one area in Aberdeen, but also the lives of the local community. If FG Burnett can assist you on commercial Property Matters then please do contact us.


ISSUE 15 APRIL 2020

Welcome This is the first edition of Property Matters of 2020, a year that has started very positively across all departments of the business. Whilst we are increasingly serving clients throughout Scotland, the North East and North of Scotland remains our heartland and although it is too early to say, there is evidence that the 'local' commercial property market is now recovering after a prolonged period of challenge. In 2019 over 500,000 sq.ft of offices were let and whilst supply is still significant an element of it is no longer fit for purpose and more likely to be redeveloped in time. The common theme of 'fit for purpose' extends to the industrial property sector, where good quality space continues to be taken up in preference to older stock. 2019 saw some 700,000 sq.ft of space transacted. Both sectors had a particularly positive second half of the year.

A PROFESSIONAL SERVICE FG Burnett are fortunate to have a very broad, longstanding, loyal client base that we will never take for granted. We will continue to strive to provide an excellent service in return for professional fees that reflect our high level of expertise and significant market experience delivered by qualified personnel. We operate in a market that does not always value such qualities with fees often being driven down through a tendering process with far too little importance put on whether the appointed adviser has the expertise and market knowledge to deliver the very best results for the client. Too often the view is taken that all suppliers deliver the same service and given that, the one proposing the lowest fee should be chosen. Caution, most of the time you get what you pay for! Richard Noble, Managing Director richard.noble@fgburnett.co.uk

FG Burnett is pleased to announce two new team members to its Property Management Department. Sandra Watt and Kevin Murray have joined the firm as Property Managers – Sandra’s focus is on the company’s residential property management service whilst Kevin’s role covers commercial property management. Working alongside Christopher Yannaghas, Director and Head of Property Management, Sandra and

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FG Burnett has been recognised by CoStar for their performance in the Aberdeen Office market in 2019. Despite challenging market conditions, CoStar Group Inc., the commercial real estate industry’s data and analytics leader, has just announced this year’s CoStar Awards recipients, recognising agencies that closed the highest transaction volume in commercial real estate deals and leads in their respective markets. In Aberdeen, FG Burnett has been recognised as being the market leader in 4 distinct categories; most active acquisition agent for area transacted, most active disposal agent for number of deals done, and most active agent in both number of deals and area transacted, from a single branch, all in the office market. Jonathan Nesbitt, Director said: "We are delighted to have been awarded these accolades and it is testament to the hard work and commitment of the entire team that we have achieved this success in a market with considerable competition".

The retail market reflects the national picture and continues to face headwinds across the High Street, Shopping Centres and Out of Town, bar the very best developments. TEAM NEWS

AGENCY AWARD WINNERS

Kevin are working with Christopher to continue to grow the company’s Property Management service. Both Sandra and Kevin come to FG Burnett with a wealth of experience in their particular sectors and are great assets to the team. In addition to the recruitment of Sandra and Kevin, the company has recently invested in new Property Management software which is currently being rolled out. Welcome Sandra and Kevin!


INVESTMENT INTO LEISURE FACILITIES CAN TRANSFORM COMMUNITIES…

Sheddocksley - External before refurb

Sheddocksley - External after refurb

What does ‘Sport Aberdeen’ mean to you?

unused, with the offer and quality of experience no longer relevant to users.

We will be best known for operating sports centres and swimming pools, but you may be surprised to know that we also run an ice rink and 1200 seat arena, an indoor tennis centre, dry ski slopes, eight fitness suites, Alister MacKenzie and James Braid designed golf courses, four 3G synthetic turf floodlit pitches and a residential adventure centre in Speyside.

Community Planning Aberdeen (CPA) had identified real issues around health deprivation and social inequality in a community that had lost hope. As the designated strategic lead for developing sport in the city, this venue represented something of a challenge for us; did we try and rescue it or let it die.

The result of a true partnership approach has seen an outdated venue being brought back to life, creating one of the most contemporary wellbeing and fitness facilities in the city. The pot-holed car park was resurfaced, and the crumbing façade illuminated through a bespoke mural, designed in partnership with residents and delivered by local award-winning artists.

THE NEED FOR CHANGE

POSITIVE IMPACT

We were fully aware of the power that sport and active lifestyles can have in acting as a driver for positive change. We did not want to see this community fall victim to a two-tier system which had seen the centre fall behind other facilities in more affluent areas, which had benefited from investment (also needed).

Usage numbers have increased exponentially, as have membership sales through our Get Active 1–5. Additional jobs have been created for local people and opening hours extended. Antisocial behaviour has almost ceased, with no significant reported incidents. Sport Aberdeen and the project have been hailed as a beacon for what can be achieved through community collaboration.

As an award-winning charity, we live by our motto: creating opportunities, inspiring people and changing lives. We reinvest every penny we generate back into the communities that we serve, making us different from other leisure providers in the city. We have been working hard during the last four years on an improvement strategy and have invested over £4.0m across our portfolio of facilities. If it has been a while since you visited our offer, I would invite you to take another look as you may be surprised at the quality and range of what we do on your behalf. Our financial commitment has not just been about modernisation - which was long overdue – it has focused on reconnecting with and giving hope to our communities. To evidence this, I want to share a case study which demonstrates the difference that investment in sport and leisure facilities can make to revitalising one of the city’s more challenged areas.

LOST HOPE People had long since given up on Sheddocksley Sports Centre. Decades of underinvestment had left the dilapidated, ageing venue isolated,

Sheddocksley - Internal after refurb

While the centre was centrally located with good access to public transport, there had been a history of antisocial behaviour, petty theft, car break-ins and graffiti, which had discouraged use. Retaining staff had become a challenge and the community had voted with its feet, leaving the centre unsustainable and vulnerable to closure. The need for change was very clear. After careful assessment our Board agreed to commit £350,000 to enable its transformation. The focus was on a substantive overhaul and modernisation to regenerate both the facility and the site on which it stands. However, investment alone would not be enough. We also needed to change the centre's narrative and remove its reputation of being in decline which had weighed it down.

STRATEGIC LINKAGES The project had been placed as a priority within the city’s sports facility strategy (2016 – 2026). It also was embedded within the CPA locality planning process. It became a focal point for regeneration and was the catalyst for a programme of community engagement which had health and wellbeing at the heart. Partners became inspired by the opportunity to create transformational change and it was clear that residents craved the social interaction and opportunities afforded by being part of the journey.

REJUVENATION

For the community where there was once embarrassment there is pride. There is a real offer that is meeting local needs and the project has been the catalyst for other developments. The long-abandoned bowling green has been converted to a community growing space which was a direct result of community consultation. It is also a hub for health walks and a Bikeability Scotland scheme. Despite the challenges facing public sector finance, there is still room for optimism. Modest investment can have a substantial impact in helping community cohesion and health improvement outcomes. I was immensely proud when Sheddocksley Sports Centre was named UK Leisure Capital Project of the Year in 2019, ahead of a much fancied £20m facility in Warrington. It shows what is possible, even when the odds seem against. We will continue to modernise our assets for the benefit of our communities and forge new partnerships in the process. By investing in community leisure, everybody wins.

Alistair Robertson Managing Director SPORTABERDEEN.CO.UK FGBUR NETT.CO.UK

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ISSUE 15 APRIL 2020

PETERSEAT PARK, ABERDEEN - TRANSITION READY FOR 2020!!

Peterseat Park is a modern but well established industrial development on the south side of the city. Forming the north eastern corner of Altens, one of Aberdeen’s foremost industrial areas, Peterseat has, over the past 20 years, evolved and now provides a range of office and workshop facilities accommodating a broad portfolio of national and international industrial concerns including RS Components, DistributionNOW, Ardyne, Aalco, Wartsila and Glacier Energy Services. The buildings on Peterseat are all detached and provide quality office and workshop/warehouse facilities complete, most importantly, with significant areas of external yard and laydown areas. A rare commodity elsewhere in the city. The working environment at Peterseat is also enhanced by substantial areas of structured landscaping. 2020 sees new opportunities emerge at Peterseat with buildings programmed for refurbishment and re-letting or sale.

Plots 14A & 14B

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These opportunities range from smaller 8,000 sq.ft buildings to a building in excess of 20,000 sq.ft on sites extending from 0.6 acres to in excess of 4 acres. Additionally, there remains extensive parcels of development ground capable of accommodating more substantial facilities on a design & build basis. Beyond that and unusually for Aberdeen, heritable industrial development land is available for sale, subject to terms. Graeme Watt, Director of FG Burnett commented “I have been involved with Peterseat Park almost from inception and have seen it mature into a quality location with a broad mix of longstanding, loyal and new occupants. 2020 sees opportunities to add to that mix and further enhance the Park as a whole and I am pleased to report that these opportunities are already being pursued. For further information on availability at Peterseat Park please contact Graeme Watt on 01224 597533 or email graeme.watt @fgburnett.co.uk

Plot 8


A WEST END RENAISSANCE It is well documented that the office market in Aberdeen is intrinsically linked to the fortunes of the oil and gas sector. As such, the office market since 2014 has been extremely challenging with supply and demand levels at polar opposites to what they were in 2012 – 2014. It is also apparent there has been a flight to quality, with modern City Centre Grade A office space being extremely popular from all market sectors professional, financial and energy. Almost 65% of all the Grade A space in The Silver Fin Building, MSq and The Capitol having been let since mid-2017, when office market conditions were at their worst. However, there has additionally been considerable commentary about the death of the West End as an office location. The stats do not necessarily bear this out. Yes, there is a plethora of marketing boards in the West End at present. As at mid-February this stood at 48 boards and the total office accommodation available between Alford Place to Anderson Drive standing at approx. 235,000 sq.ft. This represents approximately 10% of all available office stock. This also ranges from single rooms of c. 150 sq.ft up to large detached granite villas with open plan extensions. The opportunities available in this part of town are therefore considerable. 2019 saw a total floor area take up of 505,000 sq.ft. Of this, 61,500 sq.ft was take up in the West End – approximately 12.2% of total take up. On the basis that West End availability is sitting at approximately 10% of total, then this stat would seem to suggest that the West End is performing to average from a take up perspective. What is also a crucial factor is that there were 23 West End deals in 2019, representing 27.3% of all office deals concluded in 2019. The average size letting in the West End was approximately 2,700 sq.ft and on average a deal of this size concluded every 2.25 weeks. It is acknowledged that some major West End occupiers have relocated to modern City Centre space but the stats would seem to suggest

that there remain plenty of occupiers who are there to take up those vacated properties. There are certainly signs that the market is improving and interest in modern City Centre space is the highest it has been since 2014. It is quite possible therefore that there will be a paucity of availability in any of the three Grade A buildings in the City Centre in the next 12-18 months. With no other City Centre developments under construction at present, occupiers looking for quality space in proximity to City Centre amenity may very well have to refocus back to the West End to satisfy their requirements. There may be an opportunity for West End landlords to ensure that their buildings are presented in their best possible condition so as to compete with not only the current availability in the City Centre but also with their direct competition in the West End. Many West End buildings provide an excellent combination of cellular and open plan space, therefore mitigating the need for a costly initial fit-out. Furthermore, car parking ratios are considerably better than most anywhere else in the city, and largely on a par with pavilion style offices in the peripheral business park locations.

“MARK TWAIN’S QUOTE – “NEWS OF MY DEATH HAS BEEN GREATLY EXAGGERATED” – COULD APPLY TO THE WEST END OF ABERDEEN. ”

Mark Twain’s quote – “news of my death has been greatly exaggerated” – could apply to the West End of Aberdeen. Tenants are drawn towards quality buildings, proximity to amenity and car parking. The West End office stock can provide all three of these attributes. The stats above are there in black and white; the West End as an office location is performing as it probably should and perhaps better when faced with the prevailing market conditions and the competition offered now in the City Centre. Jonathan Nesbitt jonathan.nesbitt@fgburnett.co.uk Graeme Nisbet graeme.nisbet@fgburnett.co.uk FGBUR NETT.CO.UK

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ISSUE 15 APRIL 2020

LOCATION, LOCATION, LOCATION The location of a property is crucial to any property valuation with matters to consider including position, profile, neighbourhood, demographics and local amenities. The preciseness of prime or secondary locations vary by property type; for example while a prime office and industrial location may be in a particular part of a city or industrial estate respectively, prime retail units require to be in a precise row of shops or in the best local shopping centre. Whilst location is a fundamental factor in any commercial property valuation, there are a number of other factors which can affect value and require to be taken into account by valuers. For any valuation a clear understanding of supply and demand is required in a particular market sector. In simple terms, a valuer requires to know how much available space there is for a particular property type in a specific location and what recent take up levels have been for the same property type. The quality of a building in terms of its size, age, condition, specification, aesthetics and energy efficiency require to be assessed and compared to relevant comparisons which have transacted in the market. Ideally, these comparisons should be of the same size and class as the subjects of valuation, for example Grade A offices, but often exact comparison matches are impossible. For buildings in poorer condition the cost of redevelopment, outstanding repairs or refurbishment require to be taken into account, with such cost information normally sourced direct from a client or in consultation with our Building Surveying colleagues. The occupational status of a property is crucial as the valuation approach can differ depending on whether an asset is vacant, owner occupied or let. For rental valuations and the capital valuation of vacant and owner occupied property, the standard approach is to analyse

“WHILST LOCATION IS A FUNDAMENTAL FACTOR IN ANY COMMERCIAL PROPERTY VALUATION, THERE ARE A NUMBER OF OTHER FACTORS WHICH CAN AFFECT VALUE AND REQUIRE TO BE TAKEN INTO ACCOUNT BY VALUERS.” IAIN GOVE

similar property lettings or sales, where a rental or capital rate per acre or square foot can be obtained and applied to the property being valued. For the capital valuation of leased property however, an investment approach is required, whereby evidence of similar investments points to a suitable net initial yield for the asset being valued. In this respect, a detailed analysis of the lease is essential as lease length, lease break options, repairing terms, tenant covenant strength, and the user, alienation and rent review clauses can all have an impact on the attractiveness of an investment and its value. Other property factors which can affect investment value include lot size, location, future rental growth prospects, the prospect of receiving dilapidations at lease expiry and the likelihood of achieving a new letting at lease expiry or should the current tenant fail. The planning status of a property and the Local Development Plan designation is important to valuers in terms of both the value of the property in its existing use and the potential for development or redevelopment. Underpinning all valuations is a clear understanding of global, national and local economic performance and outlook which, alongside political certainty, determines business confidence, consumer spending and market sentiment. This can cause an issue for Valuation professionals as there is normally a lag between changes in market sentiment and property transactions concluding. While Valuers are bound to only utilise actual transactions in their valuations, the lag period does offer an opportunity for speculators in a rising market. Taking all of the above factors into account, the valuation of commercial property is complex. It requires the skill and experience of a qualified chartered surveyor who is able to make subjective adjustments to evidence which compares to, but does not exactly match the property being valued. FG Burnett’s Valuation team are able to provide this skill, backed up by over 60 years of post-qualification experience and an Agency team at the cutting edge of the market. For further information on our Valuation Service, please do not hesitate to contact Iain Gove on 01224 597521 or iain.gove@fgburnett.co.uk

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THE NONDOMESTIC RATES (SCOTLAND) BILL – ARE YOU READY? The news of Derek Mackay’s departure and suspension from the SNP may have stolen the headlines in February ahead of the Scottish budget but what should not be overlooked is the unprecedented changes announced to the rating system in Scotland. The Non-Domestic Rates (Scotland) Bill introduced in 2019 following the Barclay Review of the rating system in Scotland, is the first significant reform to Scotland’s rating system for many years and this will have significant implications for businesses. The Bill was passed by parliament on the 5th February 2020 and will now become the Non-Domestic Rates (Scotland) Act 2020. To put this in context, the specific remit for the Barclay Review was: “To make recommendations that seek to enhance and reform the non-domestic rates system in Scotland to better support business growth and long-term investment and reflect changing marketplaces.” One profound change is a move to three yearly revaluations rather than five yearly with a one-year “tone” date. This measure will ensure that rateable values are more responsive to changes in market conditions and aligned with real market rents. This is welcomed and is particularly pertinent in the context of the Grampian regional market following the sustained and substantial adjustment that resulted from the downturn in the oil and gas sector. Had this been the norm and a revaluation were due this year based on April 2019 rental values, then rateable values would be adjusted to reflect this change and the downward pressure on rents. The unfortunate reality is, however, that businesses in the Grampian area will have to endure a prolonged period of high rateable values against comparatively reduced rentals until 2022, at a time when conditions remain challenging. A summary of other key changes and the proposed date of implementation (where known) are as follows:

> Fines introduced for non-return of Assessor Information Request Forms. The recipient will have 42 days in which to comply with the request. Failure to respond in 84 days could result in fines equivalent to 71% of the rateable value of the property (1 April 2020). > Introduction of the Intermediate Property Rate for properties with a rateable value between £51,000 £95,000, limiting the supplement to 1.3p in place of 2.6p which will remain for properties in excess of £95,000 rateable value (1 April 2020). > Increased powers to Assessors and Local Authorities and the introduction of anti-avoidance regulations. > Duty to notify the Local Authority of changes in circumstances (within 42 days) or fines imposed. > The functioning of the appeal system and powers to increase the rateable value at the appeal stage (1 April 2022). > Devolved Empty Property Relief to local authorities – will be discretionary (1 April 2020). > Restrict the Small Business Bonus Scheme to occupied properties (1 April 2022). > Removal of 100% Empty Listed Building Relief after two years of being empty (1 April 2022). > Removal of charitable relief for Independent Schools (1 September 2020). > Retention of Business Growth Accelerator Relief, Day Nursery Relief and Transitional Relief for Aberdeen & Aberdeenshire offices and the majority of hospitality subjects. > Introduction of rates relief for contributions to net-zero emissions e.g. relief for district heating systems guaranteed until 2032 & 100% relief on Reverse Vending Machines to support retailers participating in the Deposit Return Scheme. Notably the burden on ratepayers looks set to increase as not only will the burden of rates payment remain but the introduction of fines will create administrative problems. Although the introduction of the Intermediate Property Rate is positive and will result in a tax reduction, the Higher Property Rate supplement of 2.6p remains well in excess of that which applies in England. The increase in reliefs on the

environmental/renewable energy side will provide opportunities for those investing in green technologies. Another point of interest surrounds the Small Business Bonus Scheme and spectrum of relief packages, where there has been concern that they could be scrapped completely. The reality is that the schemes are now so embedded that limiting or removing them would be catastrophic to many businesses in Scotland. Interestingly, non-domestic rates in Scotland raise over £2.7 billion in revenue per year yet 62% of all properties on the Valuation Roll are in receipt of relief. Of those properties, 56% are in receipt of 100% relief of their rates liability. That is a total value of £738 million (Source: Scottish Government Report, Non-Domestic Rates Relief Statistics Scotland, 2019). This is intriguing in the context of the debate about the rating system. Is the problem the way in which the tax is assessed, or is it the fiscal means by which the government charges the tax? The Barclay Review was tasked to provide the answer but the general principles relating to the property-based valuation exercise are largely unchanged since the Lands Valuation (Scotland) Act 1856 and the new Bill does nothing to change it. Yet the fiscal regime is extremely volatile and is constantly under review, clearly reflecting the short-term political gains available. There is a suggestion that the new Bill does not go far enough and what was needed was a total rethink that perhaps even moves away from a property-based tax altogether. A very real example is the retail sector with bricks and motor in our towns and cities which are increasingly under pressure from online retailers without the same tax burden. However, the review was shackled from the beginning as it was a condition that it had to be revenue neutral. In summary, the amended rating system in Scotland will no doubt achieve some of its objectives – most notably a more responsive system through more regular revaluations – but we certainly do not expect a system that is simpler, more transparent and easier to understand. Quite the opposite! For further information on the forthcoming changes or advice on Business Rates please contact Richard Foster on 01224 597534 or email richard.foster@fgburnett.co.uk FGBUR NETT.CO.UK

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ISSUE 15 APRIL 2020

REINSTATEMENT COST ASSESSMENTS AND THE IMPACT ON YOUR BUSINESS Reinstatement Cost Assessments (RCA’s) are, simply put, the assessment of the rebuilding cost of existing construction. Whilst it is very common for desktop update valuations to be requested by clients it is strongly recommended that full re-inspections of buildings and land are undertaken every 3-5 years. FG Burnett’s Building Consultancy department regularly undertake RCA’s for clients where the premises have not been inspected for that specific purpose in c. 10-15 years and as such, there have been relatively large increases in the sum insured i.e. c. 20%. This is partly attributable to uplifts in material and labour costs but can also occur as a result of refurbishments/ improvements to the premises which can only be considered by an inspection. For clients, the implications of being under insured are considerable, particularly where significant granite buildings are involved. In this instance, it is extremely likely that an insurer would apply average to a claim resulting in the liability to fund the shortfall, likely to be a significant sum, falling on the client. Therefore, it is extremely important that when accepting instructions from clients that the basis of the Assessment is understood as well as the extent of the buildings/land to be included. This will ensure the correct level of information is obtained during the inspection. All insurance policies are contracts of indemnity with the objective to place the insured, as far as is reasonable, in the same financial position after a loss as they were before it. The basis on which indemnity is measured will vary to suit different circumstances.

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The most common variants of assessment likely to be requested are as follows: A) DAY ONE REINSTATEMENT The majority of buildings in the UK are insured on a ‘Day One Reinstatement’ basis meaning claims are settled on a ‘new for old’ basis. In theory it does not matter how old a building is or what its state of repair. If insurers have agreed indemnity by reinstatement cover, the damage to the building will be repaired to a condition substantially the same as, but not better than or more extensive than, its condition when new and the insured will not have to contribute to any betterment in achieving that state. B) REINSTATEMENT INCLUDING INFLATION PROVISION The basis is as per the Day One basis however there will be one sum insured inclusive of an allowance for inflation and it is this sum which will be used for premium calculation and average purposes. C) REINSTATEMENT LESS WEAR AND TEAR (‘INDEMNITY’ BASIS) This basis of indemnity is a feature of most policy wordings but, in practice, few buildings are insured on this basis of indemnity. It is a rarely used method

however may be attractive when a building is very old or in a poor state of repair and the insurer may be unwilling to grant full reinstatement cover. D) MARKET VALUE This method of valuation is rare and will require the input of several Surveying Specialisms to produce. E) OBSOLETE BUILDINGS This basis of assessment could be suitable if a building were to be demolished and rebuilt in a different and cheaper form if it was destroyed or seriously damaged. F) SITE CLEARANCE, DEBRIS REMOVAL AND ‘MAKING SAFE’ COSTS ONLY If a building is due for demolition no material cover may be necessary if, when damage occurs, the date of demolition can be brought forward. For more information or enquiries in relation to RCA’s please do not hesitate to contact our Head of Building Consultancy, Jim Johnstone, at jim.johnstone@fgburnett.co.uk and he will be happy to discuss the above and advise accordingly.


TECHNOLOGY IN SURVEYING Often, when people think of technology, they imagine modern and emerging inventions replacing traditional methods of working, and people are often sceptical of them. However, we must consider that technology has been around for a considerable time now and is merely continuing to evolve and improve. I was 2 years old when Leica Geosystems introduced the world’s first handheld laser measure (disto), and this was considered a revolution in surveying. 27 years on and it is still evolving, whether it is built in Bluetooth or a camera, improved distance accuracy, or simply reducing the size of a device, it continues to improve to help us carry out our daily surveys more efficiently. The disto has certainly been an essential gizmo in my survey bag since day one and, quite frankly, I cannot imagine being a Surveyor without it. However, I imagine it will have taken a number of years for some Surveyors to ‘bite the bullet’ and begin to trust the disto all those years ago, but I bet it will now also be an essential tool for the majority of them today. There are many more forms of technology available to us as Surveyors that aim to ease our workload and increase efficiency; those as simple as Autodesk’s range of applications, Drones, 3D Laser Scanning and even the ‘Pole Cam’. However, a technology that has been at the forefront of many RICS conferences for a number of years now is Surveying Apps. Their producers claim they are a necessity in the surveying industry and those who do not engage with them will fall behind. In this article, I have considered how the use of these apps may benefit a firm and contemplate if they are as hot on the heels of the disto to take a prime spot in our survey bags as is suggested.

These apps work through smart data collection such as voice to text typing and photographic input, followed by the automatic generation of reports. This aims to save significant time over manual recording and editing to allow reports to be produced quicker in an effort to increase the efficiency and productivity of Surveyors. It almost sounds too good to be true so, does more need to be considered before firms take the leap and sign up to these apps?

would not be suited to all of those. Take Building Surveys, Valuation Reports and Marketing Reports as examples, they do require data collection, but they also require further research and development by the Surveyor back in the office which simply cannot be accurately performed by an app. Therefore, if considering these apps, I believe it would be important to ensure they will benefit the entire firm to ensure consistency across the board.

Following a demonstration, I certainly feel these apps would be very useful for surveys where the data collection is rhythmic and follows a continuous process. For example, undertaking a Schedule of Condition involves recurring statements of fact about a property’s condition and it would be very easy and quick to record this on site direct to the app for input into the user friendly template. A further bonus is the ability take a photograph with the app and for that photograph to be directly assigned to the previous recorded statement. If an app can produce this direct from site to a fully branded and finalised document, then this would cut out the middle person and save the monotonous editing and numbering of photographs back at the computer. A win-win situation for companies who carry out surveys such as this on a daily basis.

Alongside the above and the initial set-up and subscription costs, other factors to consider are the additional smart gadgets required to run the apps (further costs), battery life on site, continuous upgrades and the time required to work with the manufacturers to develop the apps to suit your specific requirements along with branding to ensure consistency of reporting across app/non-app produced reports.

However, if Schedules of Condition, or rhythmic data collection of some form, are not the only service your company provides, are these apps really of benefit to the company as a whole? Consistency across each of our departments is something that we strive for at FG Burnett, in particular with our reporting templates and branding. Across the company, we produce a multitude of reports and it is safe to say that rhythmic recording of information

I made an interesting observation recently when accompanying a fellow Building Surveyor on site undertaking a Schedule of Condition. The firm they work for are listed on an app firm’s website as being a key user of their apps, however, the Surveyor carried out their survey with a dictaphone, camera and pencil and paper. Perhaps that says something and I certainly believe those traditional items and the skills of our indispensable administration colleagues will continue to operate for some time yet until the apps have developed further and refined to allow them to become a neighbour to the disto in our survey bags. There are many other technologies I could discuss but unfortunately I don’t have a time machine to enable me to do so. However, a final thought…. a couple of years ago when surveying an office in the West End, I felt I had stepped back in time. I came across an Architect perched on his stool with his single lamp, pencil in hand and a flurry of papers surrounding him. The attention to detail and perfection of the hand drawing was impeccable and certainly shows that technology has not taken a hold of everyone. Let’s see what the future holds… Iona Foubister iona.foubister@fgburnett.co.uk FGBUR NETT.CO.UK

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ISSUE 15 APRIL 2020

SERVICE CHARGES - TRANSPARENT, UPFRONT AND FAIR dispute and any service charge that has been raised incorrectly should be adjusted to reflect the error without undue delay. This Professional Statement will continue to improve the standard of delivery in Landlord services and provide greater accountability. At the same time, it also places a responsibility on tenants in that they cannot withhold all service charge payments if they are in dispute with the Landlord or their managing agents over one particular area of service.

The Royal Institution of Chartered Surveyors require their members to ensure that the management of service charges in commercial properties is transparent, upfront and fair. Guidance for the management and administration of service charges in commercial property was first contained in the RICS’s Service Charge Code of Practice and since its inception, the Code is generally considered to have had a positive impact on the commercial property sector. By working alongside other professional bodies and the wider property industry the Code of Practice is widely acknowledged to have delivered major improvements in standards of delivery and accountability for service charges. However, the current RICS Professional Statement on the management of service charges in commercial property, differs from previous versions of the Code by the fact that it has mandatory requirements for both RICS Members and RICS Regulated Firms. This represents an even greater level of control in the administration of service charges. These mandatory requirements are encapsulated in 9 separate requirements which are considered to be the

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minimum acceptable standards of performance and must be complied with. They can be listed as follows:

Ultimately when considering the administration of a service charge at a commercial property, it is important to bear in mind that the terms of the Lease are paramount – a fact that the Professional Statement recognises – but the application of the Statement

1. Expenditure must be in accordance with the terms of the Lease 2. Managers must issue budgets annually to all Tenants. 3. Managers must ensure an Apportionment Matrix is provided annually to each tenant. 4. Any interest earned in the service charge account must be credited back to the account. 5. Managers can seek to recover no more than 100% of proper and actual costs. 6. Managers must issue an approved set of accounts showing a true and accurate record of actual expenditure. 7. Service charge monies must be held in one or more discrete bank accounts. 8. Where a service charge is in dispute, the tenant should only withhold payment of those sums that are in dispute. 9. When acting on behalf of a Landlord, RICS Managers must advise their clients following resolution of any

“THE CODE OF PRACTICE IS WIDELY ACKNOWLEDGED TO HAVE DELIVERED MAJOR IMPROVEMENTS IN STANDARDS OF DELIVERY AND ACCOUNTABILITY FOR SERVICE CHARGES.” CHRISTOPHER YANNAGHAS

will ensure that potentially costly and prolonged disputes on service charges that could jeopardise the delivery of important common services, are avoided. Should you require any assistance with regards to the operation of service charges in commercial buildings then please contact Christopher Yannaghas on 01224 597510 or email christopher. yannaghas@fgburnett.co.uk


THE ABERDEEN WESTERN PERIPHERAL ROUTE (AWPR) A NEW LEVEL OF CONNECTIVITY BRINGS OPPORTUNITIES AND CHALLENGES

Credit: Transport Scotland

North East Scotland waited decades for the AWPR, the 36 miles of trunk road has been open over a year now and feedback from users of the road around the Granite City has been universally positive. It is early days but the commercial property market is already reacting to the game changing level of connectivity. The commuter and tourist town of Stonehaven is now significantly more accessible as a result of the AWPR and one would envisage a much improved residential market in this attractive town, this should be mirrored in the town centre. Some investment in the public realm has the potential to reap considerable benefits but is the money there for the required investment to take advantage of this new opportunity? Further to the North, Westhill, which is already punching above its weight as a place to live, work and play will

benefit from the new road. There is already evidence of improved trading from key occupiers within Westhill Shopping Centre, anchored by M&S Food. The recently opened AFC training facilities and the on-site Starbucks and McDonald’s Drive Thru’s are further evidence of the pulling power of this location West of the City. Thankfully, an early decision has been made to install traffic lights at the busy Westhill junction of the AWPR. The speed at which one can travel North to or South from the Blackdog junction has to bode well for the dormitory town of Ellon and Bridge of Don itself. The road is clearly good news for the quality Business Parks namely Drum's Prime Four and Dandara's City South. Businesses with requirements have a significantly larger number of options to choose from going forward given improved connectivity, a crucial factor in satisfying either where your

employees live or the catchment of your customers. This improved connectivity is an opportunity for “peripheral” locations and developments to further their dominance or, in some cases, to try and reinvent themselves. That’s the opportunity. The major challenge? Once again the City Centre. The arrival of the AWPR solves many problems but it does mean that the City Centre’s “offer” has to be more compelling than ever if it is to attract residents/shoppers and those looking to work and play in the central area. Recent highlights include the refurbished and extended Art Gallery, the refurbished Music Hall and the on-site “Hall of Heroes" development at Marischal Square. Private sector schemes, including The Capitol and The Silver Fin Building also assist greatly. It is positive to see that the Union Terrace Gardens redevelopment has commenced, notwithstanding the significant short term disruption this brings to City Centre businesses. All these developments taken together make a difference - lets join them up by creating exceptional public realm - currently lacking. The AWPR has brought connectivity to our periphery, how about aiming for the same in the City Centre – dust down those plans for covered escalators from Union Street to The Green, replacing the Back Wynd steps à la Liverpool One.

Westhill Shopping Centre

Richard Noble richard.noble@fgburnett.co.uk FGBUR NETT.CO.UK

. 11


ISSUE 15 APRIL 2020

reduce the rating burden as far as possible. I deal with rating matters for a diverse range of properties all over Scotland and have developed considerable experience in rating law and valuation since graduating in 2005. What advice would you give someone who is looking at a career in commercial property? Go for it – there aren’t many other careers quite as diverse as property. Be determined and enthusiastic but always have an appreciation for other perspectives. How did you get here? For a Yorkshireman, Aberdeen University may not have been the obvious choice but it suited my adventurous and inquisitive side. I read a degree in Property and Spatial Planning as I have always been interested in the built environment and all that goes with creating the places where we live and work. It was also a fantastic opportunity to study a degree that would give me a sound platform to enter a professional career in a dynamic industry.

What did you want to do when you were a child? I was a typical boy and couldn’t see past being a professional footballer. I particularly enjoyed playing for Sheffield United and continue to follow them. I was also a keen snooker player but I soon realised how hard it is! For sure, I did not envisage a career in property. What does your role involve? I am now responsible for providing clients with rating expertise and am involved in all types of rating work to help

Outside of work what are your interests? I enjoy participating in most sports, especially football, pool and tennis. I am a keen cook and particularly enjoy international cuisine, which comes from an interest in international travel. Walking the dog in the hills is always a good way to relax too. Something we may not know about you? I particularly enjoy a bit of Doric but dinnae expect too much fae me! richard.foster@fgburnett.co.uk

CHEQUE HANDOVER TO VSA FG Burnett selected VSA, the North East’s leading social care charity, as their nominated charity for 2019. Over the course of the year, the company organised a series of fundraising events including their Annual Pétanque Tournament, a charity quiz night and various other activities. The company was delighted to present Vicky Youngson, Fundraising & Events Team Leader and Antony Ritchie, Corporate Fundraiser with a cheque for £7,500. Richard Noble, commented: “VSA plays a vital role in the local community and we had no hesitation in choosing them as our nominated charity of the year for 2019. I would like to thank the whole FGB team for all their fundraising efforts

throughout the year. We are also delighted to announce that we will be continuing to support VSA this year, a year which sees them mark their 150th anniversary.” To find out more about VSA visit www.vsa.org.uk

GET IN TOUCH We hope you enjoyed the latest edition of Property Matters and would love to hear your thoughts or suggestions for future articles. At FG Burnett we are passionate about sharing our knowledge and are always keen to learn more, so if you would be interested in joining our business to business knowledge sharing CPD programme then please contact Karen Ross - karen.ross@fgburnett.co.uk

12 . FGBUR NETT.CO.UK

Profile for FG Burnett

Property Matters Issue 15, April 2020  

The periodic publication by Scottish Commerical Property Consultants, FG Burnett.

Property Matters Issue 15, April 2020  

The periodic publication by Scottish Commerical Property Consultants, FG Burnett.

Profile for fgburnett
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