Blog

Mar

HNF Property to offer Residential and Commercial Surveys

HNF Property are pleased to announce that they are now undertaking surveys of both residential and commercial properties on behalf of clients.

PROBLEM HOUSE

SHOP AS VACATED BY TENANT

On residential property, we are now not only able to undertake a valuation but we can provide Type 1 and Type 2 Homebuyers’ Reports, Structural Surveys and reports on individual defects, if required.

For commercial clients, we can also undertake Structural Surveys and, in addition, we are now able to prepare Schedules of Condition and can prepare and negotiate on Schedules of Dilapidations. Reports and schedules can be prepared independently or as part of an overall negotiation from instruction to settlement.

Our reports provide straightforward no-nonsense advice dependent on the type of Survey chosen reports can be accompanied by photographic evidence enabling the client to see and easily understand our findings and advice.

Tailored to the specific purpose and client, reports can incorporate rental valuation, capital valuation and advice on lease terms, liabilities, etc.

For further information and fee quotes, contact J A Naylor MRICS on 020 8766 0123.

Mar

World’s tallest modular building under construction in Croydon

Modular construction is becoming increasingly common in the UK and enables the quick and economical construction of large residential or commercial projects using off-site prefabricated units, or modules, complete with electric and plumbing services, furniture and windows.

Over the last few months it has been hard to miss the rapid rise of the two towers at 101 George Street which now dominate East Croydon’s skyline. As a result of a joint venture between Greystar and Henderson Park, the finished towers will reach 44 and 38 storeys respectively and will, on completion, be the largest modular buildings in the world. The complex will contain an art gallery, roof gardens and a hub for local businesses and is expected to be complete in 2020.

The construction time, for this project, is expected to take only 24 months and the finished project will comprise 550 residential units. The modules are constructed in a factory in Bedford and then transported to site to be lifted into place by crane.

Greystar claim that the modules are produced using up to 80% less waste than the traditional alternative. The speed of construction and prefabricated nature of the units allows for a minimum period between off plan purchase and the property being ready for occupation, perfect for the investor.

This project is not the only modular development in Croydon, the construction of a 21-storey building on Addiscombe Road is set to be completed in Spring 2020 and will offer over 300 units with 153 affordable homes. Planning permission has also been granted for two further 24 and 26 storey towers on Dingwall and Wellesley Road. These projects form part of a wider renaissance in Croydon with the ongoing Ruskin Square development, renovation of the Fairfield Halls and the planned expansion of Crystal Palace football stadium.

Mar

Changes in the High Street can add Value

Over the course of the last few years, HNF Property Commercial Agency Team have been successful in improving tenant occupation in shops that we let and/or manage and this has had a dramatic effect on the value of the assets concerned, increasing their value by as much as fifty per cent.

Back in the 1990s, it was the battles between Blockbuster and Ritz Video. As the decade grew on, it was the large corporate estate agents and companies such as Prudential and Lloyds Bank that entered the market. Paddy Power and William Hill competed as betting shops sought to get a foothold and more recently, it has been coffee shops and food retailing outlets, particularly supermarkets’ little brother, the convenience store.

Both the increases in rent and the greater value that is attributed to a PLC covenant (reducing the yield that an investor would require) can create a significant increase in the capital value of a unit.

Those competing and with deep pockets, often pay higher rents than it is typical in a local suburban location and their strength of covenant reduces risk and increases capital value further as a result.

In the past you would not have found a Dentist nor a Solicitor in the High Street. Few would have bet on a Nail Bar or Dog Groomer occupying retail space and nobody could have envisaged uses such as Vape shops or Escape rooms.

So, the High Street is changing but is not dead and understanding grass root trends can generate occupancy, enhance and increase rents and, in turn, drive up value in otherwise difficult to let buildings, and locations.

Over the many years that we have operated in suburban commercial agency, trends have come and gone. Being so close to the market and immersed in it, enables us to give our landlords an opportunity to take an advantage when a new use operator seeks to establish itself on the High Street.

HNF Property has been operating in the London and the South East for over 25 years recognising these trends and applying that knowledge to the benefit our clients.

Please contact Jay Ward or Peter Friend on 0208 681 2000, if you require assistance with any commercial property matter.

Jan

Well Grounded Rent Concerns

Over the course of the last few months ground rents have been thrust into the spotlight and appeared in headlines, newspapers and journals that are not property specific.

The issue has arisen following the practice of developers to incorporate geared and rising ground rents within leases that they have granted on their new-build properties but the implications have extended much further.

In lease extension work, the valuation of the ground rent is an integral part of the valuation process that contributes to the premium payable by the leaseholder.

We have come across simple staged rising ground rents, those geared to the retail price index, those geared to the open market value of the property and those that increase by a set multiple at set intervals.

At the beginning of the lease, these may seem fairly insignificant but with the likelihood of inflation rising over the course of the next few years with a rapid rise in house prices and the mathematical effects that gearing can have, there can be a dramatic effect on value. It should be borne in mind that this may well raise the ground rent but in the current climate, it may well reduce the capital value of the property somewhat setting off the overall figure. Accurate valuation and understanding are therefore essential.

The practice also exists where leaseholders enter into negotiations for a lease extension outside the Act and agree to the payment of ground rent in addition to the payment of a premium or to a slightly lesser payment. In these circumstances, leaseholders will often agree to such a provision in the knowledge that they are selling and will not suffer the implications but few know exactly what difference that ground rent should make. The calculation of ground and head rents is also Important in ascertaining the distribution of premium between a freeholder and head lessee and incorrect calculation of this can easily lead to the distribution of the premium payable.

Over the course of the 10 years that we have been dealing with lease extension work we have dealt with both freeholders and leaseholders advising them on each of these different aspects of the lease extension valuation. Traps exist for the unwary!

Jan

Proximity to railway a problem?

Approximately 3 years ago a fairly straightforward crack appeared in a building that we manage and investigation concluded it to be subsidence which required rectification.

Work was undertaken to stabilise the building and repair internal damage, both to the common parts and leaseholders’ individual flats.

The fly in the ointment turned out to be the presence of a railway line within 20 metres of the side wall of the block. There was a large crack in this wall and some disturbance of brickwork and misalignment and work on the exterior was essential to complete the project.

The problem was that the railway line in question was a main railway line on which freight runs to and from Europe on a 24 hour a day basis. The proximity of that block to the railway line meant that there were potential issues with electric arc-ing (it was an electrified line) and in addition, there were concerns about the loading of the scaffolding that we were to erect on the railway embankment.

We were drawn into a world of negotiation with Network Rail, the like of which we have never seen before where design after design of scaffolding was submitted and refused consent until ultimately, we were able to design a scaffolding that could hang from the roof. The issue of arc-ing and security was paramount and we had to confirm that there would be 24-hour security on the site to prevent trespass, exceptionally strict controls of personnel and an enclosure to the scaffolding to ensure that no debris, tools, etc. could fall.

Eventually it was decided that the railway would have to be shut but the immense disruption costing hundreds of millions of pounds that this entails that Network Rail will not usually shut the railway unless there is an emergency. They do however have a number of built in slots within which they can facilitate work.

What should have been a straightforward job over one week thus extended to six months of seven-hour possessions from midnight from midnight on Saturday to 7:00 in the morning. Much of this time is taken up in ensuring that the health and safety requirements to commence work and close work are completed.

It looks like the work will now be completed by the summer and the block will be, once more, without issue – all in the day of a managing agent.

Dec

Southend

One of our clients made an instruction to market a former restaurant to the south of the centre of Croydon. Because other previous restaurant options had failed, which led us to consider other uses.