Gilbert Evans was instructed by Argos to undertake a rent review of their 14,000 sq ft store in the Southside Shopping Centre, Wandsworth and pursue the case to arbitration.
By the force of their argument, Gilbert Evans persuaded the appointed Arbitrator to value the 14,000 sq ft store on an overall GIA basis, as opposed to the zoned NIA basis as put forward by the landlords. This victory produced a rental that was more than £115,000 per annum below that which was being advanced by the landlords.
The other point of note was that the Arbitrator accepted Gilbert Evans’ analysis of the comparables which were subject to Turnover leases.
The current rent was £170,000 per annum and at arbitration the landlords agents put forward a case to support a rental of £367,500 pa, which if achieved would result in the rent increasing by a 216%.
The case revolved around the four main issues:
- Whether the store should be valued on either a zoned or overall basis.
- The appropriate rate that should be applied.
- Whether the 100% Rack Rent or the 80% Base Rent of the key comparable should be analysed.
- Should rent free period/capital contributions be analysed over the first 5 years of the term or the full length of the term.
If you think Gilbert Evans’ services would benefit your business contact:
David Gilbert – dgilbert@gilbertevans.com
Allen Evans – aevans@gilbertevans.com