Industrial unit rentals

[Incorrigible]

As many of you know I arranged to buy a garage business a month ago

I've gone through the paperwork with the curent owners/directors agreed figures etc etc. The only thing left to do was sort out the lease on the property itself

So, this morning I have a meeting with the estate manger, estate agent, current business manager to find some of them remarkably proficient at goal post moving

Originaly, I was quoted a rent of £600 a month, which I thought was fair considering the amount of work the place needs to tidy it up, and I could take the current lease on for the remaining 2 years at thet price. I don't think 2 years is long enough

Or they'll sort me out a 6 year lease for £1100 a month

They also said that if I was to extend the lease after the current lease runs out (in 2 years) that the rent would likely be even higher

WTF Do I do? I don't really want to pull out and stitch up the current owners but OTOH I don't want to agree to pay an extra £5k a year. How do I go about haggling, where do I start

fg estate agents

[Plotloss]

The utter

6 years at 1100PCM is £79200

2 years at 600PCM is £14400

So I would expect them to rise the rent to £1350 in month 25 (the difference over 4 years)

So I would perhaps take the lease for 2 years at 600 and then negotiate a rise of less than 750 PCM which would save money over the 1100PCM figure over the same term.

[Marki]

I would suggest take the 2 years get "yourself" known and then after the 2 years are up threaten to move unless they are realistic with the new terms

[Incorrigible]

anonymous said:

[redacted]

The current business owners are oblidged to pay up till the end of the lease

anonymous said:

[redacted]

This set up is a bit special, because of the location, there's a lot more space than you'd normally get but it's very tucked away. No chance of passing trade

anonymous said:

[redacted]

So do I

anonymous said:

[redacted]

Totally agree, but the existing business/customer base/location is not something that will come along again. I'd still quite to run the business just not at that price

I think Marki/Plotloss might have the best solution. I was just shocked at how someone could come out with a 60% rates increase with a straight face

[Plotloss]

They are ultimately trying it on I reckon.

Its one of those negotiations though where its shit or bust.

[Plotloss]

The other consideration is how quickly you'll outgrow the space, if at all...

If you reckon you'll need more footage within 2 years...

[Incorrigible]

anonymous said:

[redacted]

Yeah but they've got another 2 years to find that person. So I can't play hardball, if I say take it or leave it, they'll probably leave it

[Incorrigible]

Plotloss said:

The other consideration is how quickly you'll outgrow the space, if at all... If you reckon you'll need more footage within 2 years...

This will be plenty for the forseeable

[Plotloss]

Can you get someone to independently value it?

That puts you in an elevated negotiating position at least.

[mutt k]

This is complete bollox. You normally get a better deal the longer the lease you sign, not the other way round, because the landlord has the security of knowing that rent will be paid for a longer term. In 2 years time if you go, he will not only have a void period to contend with, but the additional costs of any refurbishment or modernisation that is necessary, plus the costs of marketing the space again and legal fees for tieing up the new lease.

Feel free to pm me if you like. You can trust me on this by the way; I'm a commercial estate agent

[Plotloss]

mutt k said:

This is complete bollox. You normally get a better deal the longer the lease you sign, not the other way round, because the landlord has the security of knowing that rent will be paid for a longer term. In 2 years time if you go, he will not only have a void period to contend with, but the additional costs of any refurbishment or modernisation that is necessary, plus the costs of marketing the space again and legal fees for tieing up the new lease. Feel free to pm me if you like. You can trust me on this by the way; I'm a commercial estate agent

Dont suppose you have any dealings in the Windsor area?

[Incorrigible]

mutt k said:

Feel free to pm me if you like. You can trust me on this by the way; I'm a commercial estate agent

It feels to me like it's this agent that's the problem here, dunno

YHM

[Davel]

Can you not get someone to negotiate on your behalf.

This is a rip-off.

I'm a commercial landlord and I hate empty units. Mind you we own all the units that we let out so an empty unit means no income and costs.

It could be the landlord's agent that is trying to fleece you on this, or are you talking to he landlord directly.

[mutt k]

Plotloss said:

Dont suppose you have any dealings in the Windsor area?

I can be persuaded! What's up?

[srebbe64]

I know it's a long shot, but had you considered making them an offer to buy the unit? I hate renting, so I always buy. And then, I own the property personally (possibly through a self administered pension scheme) so it is ring-fenced should the company ever get into trouble.

[billsnemesis]

On the renewal point check whether the lease has security of tenure. If the existing lease is "excluded" then you will have no right to renew and you will be left with a ransom from the landlord - move and incur the additional costs or stay put and pay through the nose.

If the current lease has security then the landlord can only evict you only on very limited and unfavourable (to the landlord) conditions. The tables are turned and the court will decide your lease provisions, including the rent, if you cannot negotiate an agreement with the landlord.

This is crucial to the strength of your negotiating position but is not mentioned in the other posts (unless I missed it)

You can tell from the lease whether it is excluded or not. Excluded leases have a clause in them referring to exclusion of Sections 24-26 of the Landlord and Tenant Act 1954. Older leases will refer to a court order while newer ones refer to a declaration. If there is no mention at all of these provisions then the lease has security.

For you the better position is to have security of tenure.

As a guide to likely rent in two years time try to get some examples of similar properties in the area with details of what their rent is and see what the local view is as to where rents are going. It will involve a bit of crystal ball gazing but the other posts will give you links to the agents such as Mutt K whose job it is to know these things.

Good luck

[johnfm]

You really should be using your own surveyor/agent to negotiate on your behalf. These guys really are worth their 0.5%

[mutt k]

johnfm said:

You really should be using your own surveyor/agent to negotiate on your behalf. These guys really are worth their 0.5%

I never get out of bed for less than 1%

[Melv]

Careful on a fully repairing lease -ensure you have the property surveyed and photographed (Condition Survey) before you take it on or you could get well stitched at the end of the lease.

Rgds
Mel

[Davel]

Agree - get a 'Schedule of Condition prepared and agreed and attach photos.

Ideally, you do not want to leave the unit in a better condition than when you enter it.