This will depend on the circumstances of the property owner and whether they are looking for a longer-term rental return or to release capital from the property. If generating regular income is of more importance, then securing a long-term tenant may be preferable. In some cases, renting the property first and then offering it for sale as a tenanted investment would attract greater levels of interest. Alternatively, smaller commercial premises may achieve a better sale price if offered for sale with vacant possession as they may appeal to owner occupiers. We can provide impartial advice to ensure that the value of your property is maximised.
This is a question we are probably asked most frequently. Unfortunately, we cannot predict the future, but we are currently experiencing high levels of demand for small industrial units, shops in busy high street locations and good quality freehold investments.
Commercial properties are generally valued on a pounds per sq ft basis, with consideration for market comparable sales or lettings. Tenanted properties are usually considered on an investment basis with an appropriate investment yield. The market rent of shops is calculated slightly differently where the rent is considered In Terms of Zone A, which is essentially a way of comparing shops of different shapes on a comparable basis given the front of a shop is generally more valuable than the rear.
It is essential that comprehensive checks are carried out on prospective tenants. Where the tenant has an existing business, we would request the last 3 year’s business and if a new business is proposed, a director’s guarantee should be secured. In addition, a rent deposit is requested (usually 3 month’s rent) although this will depend on the strength of the tenant’s business. We also carry out complete credit and identity checks on all prospective tenants
This can vary from property to property and hence it is always worth asking the agent. Often this is negotiable but will state on the marketing particulars if not. Usually we would expect a minimum term of 3-5 years.
A premium usually applies where there is expected to be exceptionally high demand for the lease. This could be down to the use class (i.e a restaurant), goodwill, a below market rent on the lease or due to contents and equipment.
Terms may be agreed on a full repairing and insuring basis whereby the tenant is responsible for all internal maintenance and a fair proportion of the external/structural building maintenance and a share of buildings insurance. Sometimes the external maintenance costs may be recovered by way of a service charge. Alternatively, terms could be agreed on a strictly internal repairing and insuring basis.
Firstly, contact Maggs & Allen. We can then discuss the various options with regard to selling a business and/or a freehold or leasehold property.
Most commercial leases will allow for a rent review provision, often 3 or 5 yearly. This could be a previously agreed fixed increase, an inflation linked increase, or as is often the case, a market review. Maggs & Allen is able to advise on the market rent and negotiate on the landlord or tenant’s behalf, and can guide you through the typical process.
This is a formal valuation provided by RICS Registered Valuer in accordance with the RICS Global Standards, which can be provided on for legal or tax purposes. A Red Book valuation will often be required for valuations which include, calculating Capital Gains or Inheritance Tax, for Divorce Proceedings or to assist a SIPP pension fund.
Maggs & Allen have a wealth of experience leasing both central and out of town offices. We can attend and provide marketing advice without obligation, and guide you through the process and likely terms of the lease.
The valuation of a commercial property can differ to that of residential, and will ultimately depend on the nature of the building. The value could be calculated based on a pounds per square foot basis, on an investment basis or on a comparable basis. Maggs & Allen are commercial Chartered Surveyors and can advise accordingly.
Shops are generally calculated on an ITZA basis, which is essentially a formula used to compare shops of different sizes on a comparable basis, valuing the area towards the front of the shop as the most valuable, reducing for the areas to the rear.
It is with Maggs & Allen.
Generally speaking, this will be similar to an estate agent, calculated as a percentage of the sale price, although there are likely to be some additional costs to comply with the relevant statutory requirements.
Similar to a sale, this would usually be calculated as a ‘one off’ percentage of the headline rent, or based on an agreed fixed price.
On average we would hope to agree terms within 2-6 weeks although this will depend on the location and size of the shop. Once we have inspected we can provide an estimate.
We understand circumstances can change. Leases often allow for the lease to be assigned to another party, subject to the landlords consent which should not be unreasonably withheld. If you are looking to assign your lease, please contact us to discuss further.
Do you have a question you would like us to answer? If so, please email us at commercial@maggsandallen.co.uk
The Ministry of Housing Communities & Local Government have confirmed the housing market remains open.
All of our departments will be open for business as usual but please be assured that stringent measures are being followed to ensure of the safety of all our clients and staff.
We will continue to offer both physical and virtual valuations and viewings for residential, auction, commercial and lettings as will at our full range of RICS surveys.
If we can be of any assistance please get in touch:
Henleaze: 0117 949 9000
Clifton: 0117 973 4940
