ISSUE 12 DECEMBER 2018 FGBUR NETT.CO.UK
INSIDE THIS ISSUE Spotlight on Aberdeen’s South Harbour AWPR/B-T Roads Project Looking Forward to 2019…. The Retail Rollercoaster - Strap Yourself In!
In this edition of Property Matters, as 2018 is drawing to a close we feature a look ahead to 2019 with regard to Aberdeen’s office and industrial property market – signs of cautious optimism. We are delighted to have Michelle Handforth, Trust Port Chief Executive at Aberdeen Harbour Board as our guest contributor. Michelle gives a fantastic insight to the exciting expansion of Aberdeen’s South Harbour which is due to be completed in the Summer of 2020.
We hope you enjoy reading this latest edition and if we can assist you on Commercial Property Matters then please do not hesitate to contact us.
ISSUE 12 DECEMBER 2018
Welcome Inevitably there is an inclination to reflect as one comes to the end of any calendar year, not a lot has changed in the last 12 months at a macro level with the single most influential factor on the economy being the ongoing trauma of the Brexit negotiations. Whilst many, arguably all, of our clients will be influenced by the outcome, at FG Burnett we have not allowed ourselves to be distracted from our core tasks of trying to deliver the very best service we can, staying focussed on securing the best outcome whether that is by way of the best price for an asset, greatest rates saving, a dilapidations outcome or any one of the multitude of other ways we serve clients on a daily basis. We will continue to do that and leave others to sort out how UK plc looks going forward – good luck to them! It is important that our working environment keeps pace with what is expected and having renewed
TEAM NEWS “IT IS ALSO APPROPRIATE THAT I THANK ALL MY FELLOW TEAM MEMBERS AT FG BURNETT, I KNOW HOW HARD YOU ALL WORK TO DELIVER FOR OUR CLIENTS.” RICHARD NOBLE
our lease at 33 Albyn Place, we have recently invested in our offices including redecoration / refurbishment works together with renewal of our computer equipment. This will stand us in good stead going forward. I would like to thank all our clients for the support they give us, we value it greatly. It is also appropriate that I thank all my fellow team members at FG Burnett, I know how hard you all work to deliver for our clients.
STEP UP FOR MOIRA GORDON FG Burnett is pleased to announce the promotion of Moira Gordon from Associate to Director and Head of our Business Rates and Taxation team. Moira has been with the company since 2010, during which time she has worked within valuation, rating and agency. Moira is currently focussed on the company’s work in relation to the 2017 Rating Revaluation and her promotion reflects her valued contribution in this and other areas of the business.
Let’s hope that 2019 is a successful year for us all. Richard Noble, Managing Director email@example.com
SUCCESS FOR KIRSTY Kirsty Gordon has recently passed her Assessment of Professional Competence and is now a member of the Royal Institution of Chartered Surveyors (MRICS). Managing Director at FG Burnett, Richard Noble, comments: “On behalf of everyone in the FGB team I would like to extend congratulations to Kirsty for her continued hard work and dedication to the profession. We were in no doubt that she would pass her APC and continue her career development.” For more information on the RICS visit www.rics.org
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metres to 300 metres – that the port can accommodate. This will ensure the port’s ability to upscale and grow not only its existing business, but to attract a wide range of activities, future proofing the port for many decades to come. Cruise, upscaled decommissioning and renewables activity are all anticipated to gain from the facilities being developed.
SPOTLIGHT ON ABERDEEN’S SOUTH HARBOUR Traditionally ports rarely attract media attention. Despite a staggering 95% of all UK trade passing through them – the equivalent of £7.6 billion GVA – for many they have remained a secret world. Recently, however, Aberdeen Harbour has been generating its own news – and all for the right reasons. The construction of its £350 million South Harbour is progressing at pace and the scale of the infrastructure involved is now becoming apparent to North East, and indeed national, audiences.
The opportunities for the Region’s businesses to reap the rewards of this level of investment in infrastructure is multifaceted. From businesses in the vicinity of the South Harbour, through to cruise tourism destinations around the Region and on to multinational companies carrying our large-scale decommissioning and renewables projects, the new facilities will provide efficiencies of scale, new markets and real scope for diversification. A key element in the success of local industry benefitting from the expansion is the development of integrated connectivity to and from the port, and the application of original and inventive approaches to land use in the area. The sectors that South Harbour will attract are space-hungry. Aberdeen Harbour Board are exploring, with its partners and stakeholders, ways to cultivate a practical, yet innovative, approach to land management in the area of the new facilities.
As one of the largest marine construction projects in the UK and with the resulting facilities - added to the existing harbour - making Aberdeen Scotland’s largest port in terms of berthage, the South Harbour project is more than justifying the attention it is receiving.
There is also, of course, another reason why ports now have film crews roaming their quays. The impact on ports by the outcome, whatever that might be, of the ongoing Brexit negotiations will be significant, and the relatively frictionless way in which international trade has been managed up until now, is only becoming apparent to the British public through the threat of its loss.
The driving force behind the project is the ability of South Harbour to almost double the size of vessels – from 165
As with any great change, however, comes opportunity, and the possibility for a natural redistribution of trading activity
northwards, to less congested ports, should not be discounted. Conjoined with the drive for a reduced carbon footprint on our international trade, more direct routes from Europe to the UK, avoiding the need for road haulage solutions, may indeed attract business to the port. “The important thing about South Harbour”, expanded the Trust Port’s Chief Executive, Michelle Handforth, “is that its upscaled capacity could form a launching pad from which we can reach out into the global shipping market and compete on a world stage. This investment will support our business community in its clear aspiration for growth, diversification and internationalisation. Whatever happens politically, we will be in a great position to grasp opportunities as they arise”. Environmental considerations have also shaped the new facilities. The design blank canvas, that South Harbour represented, has allowed Aberdeen Harbour to incorporate under-quay ducting with the capability of hosting ship-to-shore power, or offshore power lines, whilst the drainage has been configured to allow the port to be segregated into legally independent working areas – a real innovative breakthrough for the decommissioning sector. “What is happening in Nigg bay is something quite rare”, continued Michelle Handforth, “I believe that we have looked beyond the obvious response to difficult economic times by being imaginative and by building our way out of adversity. We intend not just being the biggest port in Scotland, but also the best – and this will be done through innovation and by providing our customers with what they want, where and when they want it”. Aberdeen’s South Harbour is due for completion in the summer of 2020. For more information contact firstname.lastname@example.org Michelle Handforth Trust Port’s Chief Executive
www.aberdeen-harbour.co.uk FGBUR NETT.CO.UK
ISSUE 12 DECEMBER 2018
BUSINESS RATES UPDATE As we approach the half way point of the 2017 Revaluation, FG Burnett has advised and negotiated circa. 25% of appeals lodged on behalf of appellants. These have largely been made up of small to medium sized premises within the retail and industrial sectors, of which the cumulative proposed rateable value amounts to a modest 16% of total rateable value appeals lodged. Looking ahead to 2019, we now expect that the remaining industrial appeals in Aberdeen will be cited for formal hearing alongside hotels and licensed premises in early Q2, with city centre offices to follow later in the year. It has also been announced by Scottish Government that Transitional Relief will be extended into 2018/2019. If you believe that you may qualify for the relief or require more information in relation to the general revaluation, please contact the team and we would be pleased to assist.
LODGE OF APPEALS END 30 SEPTEMBER 2017
LEGISLATIVE STOP DATE END DECEMBER 2020
CITATIONS COMMENCED Q1 2018
Moira Gordon email@example.com Kirsty Gordon firstname.lastname@example.org
NEXT REVALUATION APRIL 2022
ENERGY SERVICES AT FG BURNETT If you are marketing your property, looking to improve on energy efficiency or perhaps need to comply with company policy, our in-house Energy Assessors can provide the following commercial energy services. > Energy Performance Certificates (EPC) > Section 63 Action Plans - applicable to commercial properties over 1,000 sq.m being marketed for sale or lease (exclusions apply)
> Display Energy Certificates
For further information, please contact our Energy team Iona Foubister / email@example.com David McCurdy / firstname.lastname@example.org
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AWPR/B-T ROADS PROJECT – THE LONG WAIT IS (ALMOST) OVER! After two decades in the making, the AWPR is now nearing completion although we still do not have a definitive completion date as the new bridge over the River Don remains to be finished. There have been several bumps along the journey including the legal challenge to the Compulsory Purchase Order together with a two-year hiatus between the time that the lands and buildings were compulsorily acquired prior to the commencement of the construction works and the demise of Carillion, one of the joint venture partners. Nevertheless, whilst the AWPR/B-T project was not designed to reduce city centre congestion or solve our notorious “pinch-points”, it will nevertheless significantly improve transportation links across North East Scotland and there should be a significant financial boost to the local economy. Accordingly, there will be numerous drivers in this part of the world (and from further afield) who are looking forward to using this new roadway system. However, please spare a thought for those land-owners who either had all or part of their property compulsorily acquired in 2013 in order to make way for this public work. Of the c.400 property interests compulsorily acquired, relatively few comprised the whole property with the vast majority of the acquisitions being a part only land-take – as the compulsory purchase process in Scotland only allows an acquiring authority to compulsorily acquire those lands and buildings required for its scheme, no more and no less. This article is not designed to discuss in detail the complexities of a compensation claim where part only of a property is compulsorily acquired but, usually, it is not possible to accurately assess and quantify the claim until such time as the public work has become operational and has bedded-in. Thus, it can perhaps be appreciated that many of the AWPR/B-T compensation claims remain outstanding even though almost six years have elapsed since the lands and buildings
were compulsorily acquired. In order to properly assess such a compensation claim, a “before” and “after” valuation approach is usually adopted with the “before” value being the open market value of the property as at the date part was compulsorily acquired and the “after” valuation being the open market value of the property also on the date part was acquired but this time taking into account the effects of the operation of the public work with any decrease being the measure of compensation due: this is by no means an easy task. Thus, it is considered that for many of the affected properties, the claim could well be significant, particularly with regard to residential properties previously situated in quiet, semi-rural areas but now lie adjacent to a busy dual-carriageway and farms which are now severed by the new road system. FG Burnett is advising many of the affected property-owners and indeed instructions to act on their behalf stretch back to early 2006 following Tavish Scott’s announcement of the AWPR/B-T route. Throughout this period, we have regularly advised clients both with regard to the Compulsory Purchase Order process including the submission of objections as well as lodging claims on their behalf. In addition, preliminary negotiations with Transport Scotland’s agent, the Valuation Office Agency, have taken place. The fact that many compensation claims still remain outstanding does not necessarily mean that the affected property-owners have received no compensation in the intervening period. The compensation legislation allows for payments to account (known as Advance Payments) to be made whereby 90% of the acquiring authority’s estimate of the likely compensation due is paid. As far as the clients of FG Burnett are
“WE HAVE REGULARLY ADVISED CLIENTS BOTH WITH REGARD TO THE COMPULSORY PURCHASE ORDER PROCESS INCLUDING THE SUBMISSION OF OBJECTIONS AS WELL AS LODGING CLAIMS ON THEIR BEHALF.” KEITH PETRIE
concerned, all have received at least one such payment and many have received several payments. Thus, once detailed and formal negotiations commence and settlements are achieved, then appropriate balancing payments will then be made: however, this is unlikely to occur until well into 2019. Lastly, it should also be borne in mind that there is an entitlement to (limited) compensation for the depreciation in the value of properties even though no land has been compulsorily acquired from them. This position falls under Part 1, Land Compensation (Scotland) Act 1973 which covers the situation whereby the owners of property situated adjacent or close to a public work are able to claim compensation for some of the depreciation in value therein. The earliest such a claim can be made is one year after the public work becomes operational and thus these claims will not be able to be instigated until 2020. This entitlement will be the focus of a future article in Property Matters. In the meantime, please drive safely on the AWPR/B-T once it is operational! Keith Petrie email@example.com FGBUR NETT.CO.UK
ISSUE 12 DECEMBER 2018
LOOKING FORWARD TO 2019….
Office & Industrial Take-Up (sq.m. (000’s))
These supply figures are now reflecting 2.5M sq.ft and 2.9M sq.ft respectively for industrial and office stock within
Aberdeen. Taking an average year of take-up, this reflects around 4 – 5 years of take-up to reach a ‘healthy market’. This is a sobering statistic and we are all hopeful the price per barrel remains in the $70-80 region for the foreseeable future.
“THERE ARE ENCOURAGING SIGNS IN THE MARKET WITH NEW OIL AND GAS ENTRANTS HAVING SECURING COMMERCIAL SPACE IN THE LAST 18 MONTHS WHICH INCLUDE SERICA, CHRYSAOR AND SICCAR POINT.”
There are encouraging signs in the market with new oil and gas entrants having securing commercial space in the last 18 months which include Serica, Chrysaor and Siccar Point. FG Burnett represented all of these parties and are also involved with active requirements for other established energy sector occupiers. These appointments bring positive news to a market which has been stagnant for some time with very little demand for new space. There has never been a better time for tenants or occupiers to acquire commercial space in Aberdeen.
100 80 80 60 60 40
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Brent Crude Oil Price ($ per barrel)
As we approach the end of another year, there would appear to be a degree of cautious optimism. Another year on from one of the worst oil and gas downturns in the North Sea’s history which caused significant job losses, a belt and braces attitude and general survival it would appear that the worst is now over. The aftermath left a string of casualties, the by-product being a gross over-supply of office and industrial space. Thankfully we are witnessing slightly more activity in the market and recent take-up levels appear to have stemmed spiralling supply figures.
Commentators suggest that the ‘new world’ Operators who have ‘trimmed their fat’ are boasting lower lifting rates and as a result, making similar profits to that of 5 years ago when the oil price was over $100 per barrel. It would appear that the Service Companies are still to reap the rewards which the Operators are currently enjoying but hopefully the purse strings will loosen shortly to allow the supply chain to benefit. The market for drilling contractors is steadily improving in the North Sea, especially compared with 2015 and 2016, when rig owners resorted to coldcalling Operators to try and find work. Today, there is a fairly healthy supply of invitations to tender or request's for information coming through for North Sea rigs - competition for available work remains fierce. Although the North Sea rig count is not expected to grow significantly over the next year, signs of an improving market are afoot, particularly for semisubmersibles. Operators are not only tendering for new rig contracts but also exercising options
on existing contracts, likely because higher oil prices are again making it economic for them to pursue drilling. In particular, Operators are already starting to secure semi-submersibles for work in the North Sea in 2019 or even later. Oil and Gas UK forecasts predict that capital investment in the UK oil and gas sector will be relatively stable for the rest of the decade, after sharp falls during the downturn. The latest survey data in May 2018 suggests a rise in confidence within the sector and the highest capital investment since 2013. This recovery will hopefully lead to an increase in demand and bring Aberdeen’s commercial property market back in to sync… however, this may take some time. Many wounds are still raw and companies are treading cautiously which would appear to be a wise move in the current climate. FG Burnett offer an experienced Agency team and are well placed to provide the very best advice to occupiers seeking for a move to new premises.
“THESE APPOINTMENTS BRING POSITIVE NEWS TO A MARKET WHICH HAS BEEN STAGNANT FOR SOME TIME WITH VERY LITTLE DEMAND FOR NEW COMMERCIAL SPACE. THERE HAS NEVER BEEN A BETTER TIME FOR TENANTS OR OCCUPIERS TO ACQUIRE COMMERCIAL SPACE IN ABERDEEN.”
Please contact our Agency team to discuss your property requirement. Graeme Nisbet firstname.lastname@example.org Jonathan Nesbittt email@example.com Graeme Watt firstname.lastname@example.org FGBUR NETT.CO.UK
ISSUE 12 DECEMBER 2018
Whereas prevention through regular and thorough fire risk assessments are a vital step in managing fire safety in a property, a building owner has some measures to protect the building itself. Of these, sprinklers are one of the most effective. A sprinkler is a relatively simple piece of engineering. A pipe delivering water is connected to a sprinkler head. Within each head is a thermal element, normally a glass bulb filled with heat sensitive liquid. As the fire reaches the designated temperature the bulb breaks and water is released directly onto the fire. Sprinkler heads are not affected by heat, only smoke.
SPRINKLERS PROTECTING THE BUILDING ASSET FROM FIRE A number of recent very high profile building fires has meant that the safety of buildings in the event of a fire is very much at the centre of public interest at the moment. Although the encouraging news is that actual incidents of fire are declining – at around 8,750 per annum – even this annual figure means that there is in effect a fire incident at a commercial property every hour in the UK. Moreover, the economic cost of fire increases year on year; in 2016 this was costed at £865 million of insurance claims with a further £150 million incurred from business interruption costs arising from fires at commercial property premises. It is important to consider that the emphasis of Building Regulations is more towards the saving of life by ensuring a fast, safe and orderly evacuation rather than the protection of the building asset itself. Therefore, a building owner must consider measures that will build in some resilience to preventing extensive and costly damage caused by fire.
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Sprinklers are extremely reliable and unlike a scene from a Hollywood movie, only the sprinkler head nearest the source of the fire will activate; there will not be a chain reaction leading to a torrent of water through all the other sprinkler heads. Once activated the sprinkler will either extinguish the fire or retard it until the emergency services arrive. Recent statistics indicate that of 2,000 fire events involving sprinklers, 65% only saw one sprinkler bulb activated illustrating that the fire was extremely localised, and could be contained by just one sprinkler head. Of the remainder, 20% of the sample size saw two bulbs activated, meaning that in only 15% of the sample size was the fire of an intensity and size sufficient to activate three or more bulbs. A study undertaken in 2017 found that sprinkler systems were able to control or extinguish fires in 99% of cases. Ideally provisions for sprinklers are best made in the initial design and construction of a building as retro-fitting can be complicated and incur a higher capital cost to accommodate pipe runs and pumping equipment within the existing building general arrangements. The average cost of installing a sprinkler system in a new commercial building is in the range of £33 - £35 per sq.m. Interestingly, the UK lags behind the rest of the EU with regards to having a statutory requirement for installation of sprinklers in commercial properties.
“SPRINKLERS ARE EXTREMELY RELIABLE AND UNLIKE A SCENE FROM A HOLLYWOOD MOVIE, ONLY THE SPRINKLER HEAD NEAREST THE SOURCE OF THE FIRE WILL ACTIVATE.” CHRISTOPHER YANNAGHAS
The current fire safety guidance in the UK has no prescribed limit at which fire sprinklers are required for single story industrial buildings other than warehouses. In England and Wales, the limit is set at 20,000 sq.m’s above which sprinklers must be installed. Scotland is slightly less at 14,000 sq.m’s, but both are far behind countries such as France (3,000 sq.m’s) Germany (1,800 sq.m’s) or even Norway which has by comparison, a miniscule minimum of 800 sq.m’s. The property industry as a whole waits for the outcome of the Grenfell enquiries which will inevitably lead to changes in fire safety legislation and tightening of the safety measures that property owners must deploy in order to enhance safety. In addition, the result of an Independent Review of Buildings Regulations and Fire Safety that was conducted earlier in 2018 was a report that set out over 50 recommendations for government as to how to deliver a more robust regulatory system for the future. The legislative environment is going to become stricter and sprinklers have a benefit to play in meeting these statutory obligations and also to protect the building itself. Should you require further assistance with regards to incorporating a fire safety regime in the day to day management of commercial premises, then please contact either Christopher Yannaghas on 01224 597510, Freya Eardley on 01224 597508, or Holly Wyatt on 01224 597513.
THE RETAIL ROLLERCOASTER STRAP YOURSELF IN! The retail market has had a turbulent 2018 and there is nothing to suggest that 2019 will be any different – why would it be? A number of the “victims” of 2019 have already been identified…. the media like it that way. Retailers feel embattled, constant media speculation of who will collapse next does nothing for the confidence of the targeted operator. Much like the current coverage the media gives politics - they need to back off - give retailers at least some space to contemplate the way forward as they must feel besieged. My focus is ‘bricks and mortar’, lets reminisce and just call them shops. Those occupiers contemplating their future plans consider/blame the shambles of Brexit, unseasonal weather, rates, oil prices, the pound – of course these are all relevant challenges but THE factor is not new, it’s called online shopping – ‘The Web’. Our automated world will prefer drones to people, there will be no slowdown to the pace of technological change, the best we can hope for is a blend of shops and online trading. For shops read collection points and showrooms. Zara owner Inditex have announced that all of its brands would be sold online to every country in the world by 2020 – it has no option but to get on and do that. New flagship stores will have “online” sections and there will be automated collection points for collecting online orders. That will become the norm for large global and national operators. Driving footfall by bringing online collection in-store is going to grow, 50% of online orders are picked up in-store at Next. Next’s stated aim – “an online platform that includes stores.” The same key words from the last 10 years but in a different order. And just when you think you know what is going on, online retailers decide they need physical stores - Zalando, Boden and Missguided to name but a few. Word of caution though as these will be few in number, primarily for
brand awareness and so far certainly still being seen as an experiment. I have to steal the description of Amazon made recently by a retail chief executive, he labelled Amazon “an ongoing and self-fuelling inferno that will consume many more retailers before it begins to abate.” Amazon is a player in all sectors – to give an example, it is a top 5 player in the UK toy market, with Amazon’s service levels including consumer confidence in financial security and “I know I can send things back” it is little wonder that Toys R Us failed, an altogether uninspiring retail experience. But we have to rise to the challenge not shout “the end is nigh!” The challenges need to be embraced, town centres need to focus on being the place where a multitude of activities take place – for too long they have been seen as the place to shop, now it must be about the place to live, work and gather for events, socialise and visit. So, in addition to retail we need much more housing, offices, community facilities and open spaces. This will sustain the food and beverage and service sectors. Dwell time of visitors coming to our central areas needs to be increased. Fear not for the best regional shopping centres and retail parks, they are operated by property companies and experienced asset managers, experts in their field who know what they are doing and react relatively quickly to changing trends – one of the most significant examples being the change from pure shopping centres to schemes that have considerable if not dominant food and beverage and leisure (usually cinema) offers.
“THE CHALLENGES NEED TO BE EMBRACED, TOWN CENTRES NEED TO FOCUS ON BEING THE PLACE WHERE A MULTITUDE OF ACTIVITIES TAKE PLACE.” RICHARD NOBLE
It is the speed of change or lack of it that in town centres is the worrying thing – multi ownership of property and the lack of funds available to Local Authorities who do want to influence the townscape. City centre/town centre tsars have been proven to work, people with passion and power who can carry along often sluggish local politicians and planning departments with them. Local Authorities should not be afraid to borrow to invest in their own town centres but they do need to get on with it. As Mark Twain said “the secret of getting ahead is getting started” and time is of the essence. There will always be a place for physical retail. One commentator said recently that customers need a thrilling and inspiring experience – problem is that is often not the case so retailers all need to up their game no matter what they do or accept they will disappear. Richard Noble email@example.com
ISSUE 12 DECEMBER 2018
BUILDING CONSULTANCY CASE STUDIES IPIF Ltd
FG Burnett were appointed by Jones Lang Lasalle on behalf of IPIF Ltd as Contract Administrator for the enabling works at Unit 1, Miller Street, Aberdeen.
Sector Industrial Size
Instruction Landlord Enabling Works Cost
The works comprised demolition of surplus office accommodation and mezzanine floor, refurbishment of internal office/warehouse space and external decoration to cladding.
Broadland Properties Sector Office Size:
c. 1,300 sq.m
Contract Administration & Principal Designer
SBCC Minor Works with Contractor’s Design
removal of partitions from a cellular layout to open plan; removal of the perimeter heating system and installation of an air conditioning system; upgrade of toilet and kitchen facilities and other general decoration and flooring works. Following preparation of the Specification of Works and tender documentation, a single stage selective tendering process was completed and a Main Contractor awarded the contract.
On completion of the renunciation of two floors of offices within the building by our Agency department, FG Burnett’s Building Consultancy department were instructed to act as Contract Administrator and Principal Designer for the refurbishment of these office spaces.
Sector Various Size Various Instruction Planned Maintenance Cost
Contract N/A FG Burnett were instructed by the Church of Scotland Presbytery of Gordon to carry out quinquennial Planned Maintenance Inspections of all properties associated with Inverurie
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“THE OFFICE FLOORS NOW PRESENT AS HIGH QUALITY, FULLY AIR CONDITIONED OFFICE SPACE.”
The program ran for 16 weeks and FG Burnett monitored the works, agreed and certified all valuations, snagged the works and agreed Practical Completion. Full Principal Designer duties were also undertaken in accordance with CDM 2015.
The initial stage of the project required an inspection of the offices to identify all works required to return to a high quality, open plan space. The contract included
Presbytery of Gordon
Jim Johnstone firstname.lastname@example.org
The office floors now present as high quality, fully air conditioned office space. West Church, Foveran Parish Church and Ellon Church. This included churches, church halls, manses and a chapel. Overall, a total of eight buildings were surveyed by a team of three building surveyors. Reports consisted of an overall Condition Survey of each building and a five-year Planned Maintenance Report, detailing the relevant repairs advised to be carried out until 2022. Following on from the instruction FG Burnett were retained to provide advice for the format of future quinquennial inspections across the presbytery.
Total E&P UK Ltd
@SIPP (Pension Trustees) Ltd
Instruction Terminal Dilapidations
Instruction Terminal Dilapidations
Contract N/A FG Burnett were instructed by the landlord of the premises to prepare and serve a Terminal Schedule of Dilapidation on the outgoing tenant and thereafter negotiate a financial settlement thereon. The negotiation in this case was made more problematic by the fact that the existing sub-tenant undertook to physically carry out the dilapidations works under their agreement with the head tenant, this being subject to a schedule of condition.
FG Burnett were instructed by the tenant of the premises to negotiate with the landlords surveyor in relation to agreeing their liabilities under a lease which would shortly expire.
Following completion of the sub-tenant’s works it was therefore necessary to jointly inspect with the head tenant’s
The initial landlords claim was particularly robust in nature and included several items which could be counted as “extraordinary repairs”. In addition, the building had suffered from some water ingress issues which could be considered to be latent and inherent defects.
Prepare and Serve Terminal Dilapidations
The client was the first occupier of the premises and had accepted the liability for such eventualities as well as “extraordinary repairs”. Nevertheless, through a tough negotiating stance FG Burnett achieved a saving to the client of 38% from the original claim.
Ardroil Investment Company Ltd Sector Office
Contract N/A FG Burnett were instructed by a private client to prepare a Terminal Schedule of Dilapidations prior to the expiry of the tenants lease on a traditional granite building. During the tenants occupation, both buildings had been altered to provide free access between the formerly separated buildings.
surveyors and agree a financial settlement for the shortfall in liabilities. Ultimately, the client received what was a fair settlement and reflected the difference between the respective lease liabilities. Our Agency colleagues were also engaged to re-let the premises and following a brief marketing campaign were successful in what was a very challenging local market at the time. In addition to the agreement of the new lease the Building Consultancy Department prepared a new EPC and Section 63 Action Plan for the premises.
timescale and, as such, our client instructed the department to instigate the remaining snagging and reclaim the expenditure. Allied to this, our client also provided instruction to refurbish the internal toilets and tea prep areas to encourage interest in the re-letting of part of the building (our Agency/Investment team having secured a sale for half of the premises). In addition, the Building Consultancy team also prepared a new EPC for the premises in advance of any new lease agreement being put in place.
In this instance, the client wished the outgoing tenant to undertake the works as a result of the breach of their obligations. As such, FG Burnett advised the client on strategy to be adopted and monitored the progress of the tenants works. During the process it became apparent that the tenants contractor was failing to complete the snagging works in the agreed
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 - email@example.com
Property Matters Issue 12, December 2018