Commercial ISSUE 3 SUMMEr 2016
matters
The North– South divide: A question of investment
PLUS: What you need to know about CDM 2015 l Holistic office design l Lease-end security l Rate relief cuts l Focus on Aberdeen
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Welcome
contents
Uncertain times...
4 Lease end: a question of security.
Welcome to edition three of Commercial Matters. In a year, which includes both a Scottish Election and a European Referendum, the issue of political uncertainty is explored as part of our cover story on the North-South divide and property values on page 6. One major change, which came into force on April 1, is to vacant rates for industrial properties. Unfortunately 100% relief is now only available for six months (however this can be back dated prior to April 1) then 90% void rates will be payable. This comes as another blow to landlords struggling to find tenants. See page 10. The first quarter of 2016 has been a busy time for our agency department and in this issue we also look at the changes in CDM regulations, refurbishment projects, holistic working environments and security of tenure. As ever, we welcome your thoughts on issues and areas of interest you would like to see in the next editions. If our team can help with any of your property needs, we’d be delighted to hear from you by telephone, email, or social media. Getting the right advice at the start of a property transaction can save you both money and time in the long run. Jill Gayford
Jill specialises in commercial management. jill.gayford@ckdgalbraith.co.uk 0131 240 6987
5 What you should know about CDM 2015.
6 Focus: Aberdeen.
Cover story: North v South of the border.
8 Deal round-up. Rentals and yields.
A new standard for sizing property. A week in the life of a building surveyor.
10 Rate relief cuts.
The challenge of a listed refurbishment.
The firm provides a full range of property consulting services across the commercial, residential, rural and energy sectors. CKD Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances. Follow us on Twitter: @CKDGCommercial Like us on Facebook: www.facebook.com/ckdgalbraith Join us on Linkedin: www.linkedin.com/company/ckd-galbraith
Pamela Gray explains the implications of a lack of security of tenure for commercial tenants in Scotland.
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11 CKD Galbraith is Scotland’s leading independent property consultancy. Drawing on a century of experience in land and property management, the firm is progressive and dynamic, employing more than 250 people in offices throughout Scotland.
No security at the end of a lease
Commercial Matters is produced by J K Consultancy, Glasgow, and designed by George Gray Media & Design, St Andeux, France. © CKD Galbraith LLP.
One of the key areas of difference between Scots and English law is at the end of a commercial lease. In England, tenancies are normally subject to the protection of the Landlord and Tenant Act 1954, and, unless contracted out, a tenant has legal rights to renew the lease, subject to agreement on terms. In Scotland, a lease is for the period stated and no longer. Simply put, there is no security of tenure for tenants in Scotland. Many landlords and tenants have been caught out because they are used to the legal protections south of the Border. This can be a costly oversight. In Scotland, subject to appropriate notice being served, a commercial lease ends at lease expiry with all the associated implications for the parties. In the countdown to termination date, if a tenant intends to move out, or if a landlord wishes to obtain vacant possession, a minimum 40-day notice must be served on the other party. If the 40-day notice is not served in time, the lease automatically continues year to year on
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Some basic procedural rules to bear in mind l A notice to quit is personal to the party serving it. That means that if, for example, a property is being sold, the purchasers, under missives, can’t rely on the notice served by the sellers. Similarly, an assignee should not rely upon a notice to quit served by the assignor.
l Remember the Tenancy of Shops (Scotland) Act 1949 can allow tenants of retail premises the right to obtain a new lease from the landlord for a limited period. l Assuming the intention is not to
the original terms and may only be terminated on the anniversary by giving suitable notice. This is known as tacit relocation. Sometimes the parties want to allow tacit relocation to kick in. A tenant may be reluctant to sign for a longer period because of business uncertainty or suspect they may outgrow the premises. By continuing on tacit, they have more time to evaluate the options. Sometimes both parties are happier to maintain maximum flexibility and, certainly for tenants, it means they can defer payment of terminal dilapidations by rolling forward this liability for another year. Leases can continue for years on this basis. Landlords are often happy to allow tacit relocation in a falling market. Some deliberately avoid serving notice, preferring the lease to continue for another year than risk having a vacant unit with the associated void holding costs or having to re-let at a lower market rent, possibly on more onerous lease terms. So tacit relocation can be a useful tool for both
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Tacit relocation can be a useful tool for both landlords and tenants.
continue beyond the lease expiry, landlords need to apportion final rent demands so that rent is not demanded beyond the contractual period of the lease, and tenants should be careful not to make payment of rent or other sums attributable to a period beyond the termination date. l If there is a sub-tenant in occupation, any notice to quit must be served on the immediate tenant and also the sub-tenants. l Even if the tenant has served notice on the landlord, rather than the other way round, if the landlord wants to be certain of vacant possession they should also serve notice on the tenant and any sub-tenants. l Dilapidations will need to be assessed up to the lease end, and the landlord needs to ensure that these are served timeously, in advance of the lease expiry.
landlords and tenants, given the finality of the security of tenure situation, but it highlights the importance of forward planning to avoid being caught out. As with most property decisions, much depends on the state of the market at the time. However, we have seen landlords capitalising on the tenant running out of time to find alternative premises and having no option but to agree to new ‘landlord biased’ terms. Equally, some tenants have gained the upper hand by using the lack of security of tenure and the threat of potential voids to renegotiate many of the lease terms, including rent. If the parties want to avoid having a gun put to their heads, which is never good for longer term landlord/tenant relationships, preliminary discussions should take place well ahead of the expiry date. Pamela Gray is in charge of our commercial property asset management team. pamela.gray@ckdgalbraith.co.uk 0131 240 6963
www.ckdgalbraith.co.uk | Twitter: @CKDGCommercial | Commercial Matters Summer 2016 | Page 3
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The 2015 regulations see commercial clients having a crucial influence over how projects are run, including the management of health and safety risks.
CDM 2015: What you need to know Kevin Cochrane sets out how key changes in health and safety legislation affect the way construction projects must be managed.
The Construction (Design and Management) Regulations 2007, which aim to improve the health, safety and welfare of the industry, were replaced by CDM 2015 in April last year. The 2015 regulations see commercial clients having a crucial influence over how projects are run, including the management of health and safety risks. Whatever the project size, the commercial client has contractual control, appoints designers and contractors, and determines the money, time and other resources for the project. The commercial clients must make suitable arrangements for managing their project. These arrangements include appointing a suitably qualified principal designer (PD). The PD role, which replaces the CDM co-ordinator under CDM 2007, is usually performed by an independent consultant, and carries additional responsibilities, including: • PD having considerable responsibility for co-ordinating and reviewing other designers’ work; • PD being legally responsible for all duties placed on them, regardless of whether or not they sub-consult the role. So, who should take the PD role? It is still possible for one party to be appointed as
more than one duty holder. However, the PD should have the appropriate skills, knowledge, training and experience to undertake the position. The PD can be anyone instructing or managing construction-related work, and it is recommended it should be someone closely involved in the design of the project, such as a building surveyor. The role starts at concept design and continues until project completion. Most of the requirements of the PD role are at design stage. The biggest practical change the regulations aim to achieve is in the behaviour of the client, who has greater responsibility in appointing the PD and principal contractor (if appropriate), ensuring they comply with their duties, and notifying HSE of the project. Finding the right CDM team will be important. Clients who are regular developers are likely to be able to manage this, but it is a substantial ask for new or inexperienced clients. CKD Galbraith has acted as PD in a number of office and industrial unit refurbishments throughout Scotland. Kevin Cochrane works in the building surveying team. kevin.cochrane@ckdgalbraith.co.uk 0131 240 2282
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Pam Over looks at the importance of office ergonomics and its value in retaining employees.
Rise of the holisitic workplace “
In the wider office environment, office design increasingly allows for more relaxation space.
Employee retention is vital for a successful business, and one way to achieve it is by creating a healthy, productive work environment. Most of us have heard about US companies offering their staff laundry services, juice bars and games rooms to unwind in. But this holisitic approach to the workplace is also blooming in the UK. We have led a range of office refurbishments and have seen a noticeable shift in how the workplace is designed and furnished to focus on the employee’s health, wellbeing and productivity. There has been a broadening of scope from the traditional focus on the individual’s workstation to reduce discomfort, prevent injury or increase work efficiency to encompass how the employee uses the wider work environment. Much of our work today is “knowledge work”, which is collaborative and social in nature and no longer restricted to the primary workstation. A good office environment reflects this by allowing for informal and formal collaboration, group productivity and interaction. So a large-scale interior work environment with good planning and furnishing of all individual and group spaces is required. Studies show that individuals work better in flexible, adjustable workstations. Creating a
flexible interior space by determining the right number and mix of work zones, such as single or shared work stations, huddle rooms or project rooms will give employees the greatest choice in finding a space that best meets their needs. Clever design can improve interaction by reducing the height of partitions and ensuring furnishings and colours reflect the zones. Open sight lines make it easy for people to see when co-workers are available to talk or busy with a task. Research carried out by Herman Miller discovered that by 2015 non-dedicated team areas were the single largest allocation of space (more than 35%) in the office. The same research revealed the typical workstation is unoccupied 60% of the day. Likewise, conference rooms are rarely used to capacity as the preference grows for more informal meeting spaces. So in the wider office environment, office design increasingly allows for more relaxation space. There are many examples of this from skateboarding (Facebook) to table football (Google) to bars, chill-out zones and in one building we manage in Dundee, a fully laid out interactive games zone. Assisting employees’ work/life balance is now the norm. Companies offer showers and locker areas with free towels and toiletries for those that run or bike to work, refrigerated storage for online g rocery delivery and free meals. For better or worse, the future workplace is m oving away from the concept of the individual ever needing to leave the building and allowing them freedom of choice to determine what work environment best suits them. Pam Over leads CKD Galbraith’s commercial team. pam.over@ckdgalbraith.co.uk 0131 240 6965
www.ckdgalbraith.co.uk | Twitter: @CKDGCommercial | Commercial Matters Summer 2016 | Page 5
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North versus South of the border: what cost investment?
FOCUS: Aberdeen
Weathering the oil price storm Mark Thom reports on the impact of Aberdeen’s changing fortunes. Aberdeen’s economy is inextricably linked to the fortunes of the North Sea oil and gas industry. When the oil price was high, most recently between 2009 to 2014, the economy and underlying commercial and residential property markets boomed, confirming the city’s reputation for being counter-cyclical in performance relative to the rest of the UK outside London. Since the oil price began falling in late 2014, however, the economic brakes have been applied, just when many large space speculative offices were underway. The impact of this increased supply and reduced demand for space has been most obvious in this sector. Headline rents are still being maintained, but attractive incentive packages and increased lease flexibility are becoming the norm – which is not surprising considering the bullish market conditions Aberdeen has enjoyed over the last few years where virtually no rent-free periods were being granted. There are still opportunities for landlords and tenants to achieve beneficial deals, but it requires a different mindset now. Tenants know that the costs of relocation can be considerable and so, if landlords can be realistic, there are still prospects for negotiating terms acceptable to both parties. Despite the change in market conditions, the industrial market remains relatively stable, with most occupiers seeking the more modern industrial stock and paying appropriately, depending on eaves height, yardage and office content/specification. Developers are still undertaking some speculative industrial projects and lease lengths on new-build industrial stock remain at 15-20 years, albeit we anticipate that incentives will rise. Secondary stock lease lengths remain at 5-10 years, although increasingly landlords are having to accept more flexible lease terms in order to minimise or prevent rental voids. Union Square, Bon Accord and St Nicholas Shopping Centres make up the prime retail heart of Aberdeen now, and, with polarisation caused by these developments, there continues to be a realignment of the historical retail pitches with an increasing number of change of use applications. With every change in market conditions come opportunities, and for those parties willing to be flexible and to embrace change, there is still potential to achieve real property performance through active asset management. Mark Thom works in the commercial property asset management team. mark.thom@ckdgalbraith.co.uk 0131 240 6997
Richard Higgins looks at the politics and economics behind the pricing differential between Scotland and the rest of the UK.
We live in interesting times. This year sees two more significant visits to the polling station for the Scottish electorate.
King Street, Aberdeen.
First was the Government Elections in May followed by the Referendum on the European Union in June. This will finally bring to a temporary close a period of constant electioneering in Scotland since the 2010 General Election. Scotland’s political climate is generating significant noise following the no vote in the Independence Referendum and the almost clean sweep of 56 of the 59 Westminster seats by the SNP. Despite the new Scottish Parliament returning with two votes shy of an SNP majority, the prospect of a second independence referendum will continue to bubble away. Despite the noise, Scotland is a remarkably stable and successful country within the UK. It attracts private and overseas investment into both land and property with margins that, when viewed out of the cauldron of political expediency, are attractive within a global context. Recent market reports confirm that Edinburgh has retained its position within the top 20 cities of a global property investment index. Investor confidence remains positive. There is a yield differential between Scotland and the rest of the UK driven in part by the attractiveness of London and South-East England as a target for overseas investment. We have seen recent investment from European investors and parties from the Far East looking to seek solace and safety from the more volatile Asian and Russian markets. The introduction of Land and Business Transaction Tax (LBTT) last year, the
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rsus
year no change between the Scottish and rUK systems has been promoted. But with SRIT as one of the prized levers of power, there are suggestions that differential rates will emerge. Some are concerned. When looking at Scotland as a market place, they see a confusing political message: Scotland wants to be independent of England, we are told, but remain within the European Union.
er: st ent?
The creation and devolution of additional powers to the Scottish Government do create risk, and it is not difficult to foresee the Scottish Government increasing income tax. But we should not discount these powers offering opportunity too – how that arises is a moot point. Indeed, the Scottish Labour party has already set out their SRIT policy to create a differential. This may have a significant effect on the labour markets. Some may interpret it as being expensive to take up or develop a career in Scotland and may choose to seek the relative stability south of the border or even overseas. If businesses see a climate of less choice within the labour markets and less talent, it is not unreasonable for them to make investment decisions to grow and develop their activities south of the border. Fortunately, the rhetoric does not match the reality at present. Scotland has significant advantages within its oil and gas, renewable energy, education, research and development and myriad other areas of excellence. But they need more from government. Our leaders need the vision to encourage enterprise so Scotland can truly steal a march on its neighbours south of the border. While we have the perceived differential, investors are already voting with their feet, attributing greater value to properties in England to reflect the lower risk. A number of firms and private individuals we know have stated that during this period of ‘constant electioneering’, they are sitting on their hands with regard to a strategy for future investment into Scotland.
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Investors are already voting with their feet, attributing greater value to properties in England to reflect the lower risk.
replacement for stamp duty, brought a hive of transactional activity before its introduction, but has subsequently generated lower returns than the old system. In March the UK Budget introduced a similar tiered stamp duty regime for England and Wales, but there remain minor differences between the two, highlighting the continuing diversity between Scotland and rUK. In the same month, the UK Government passed the Smith Commission proposals in the form of new legislation, which confers further economic power to Scotland, and the Act has now received Royal assent. This enables further fiscal powers to be devolved to the Scottish Parliament. The Scottish Rate of Income Tax (SRIT) is already in place, and for this election
Scotland remains an attractive place to live, work, invest and play, and the differentials in pricing can be seen in different ways by different people. We must always raise our view from the immediate horizon and consider our position within a global context. High net worth individuals and large investment funds place less emphasis on borders and more on political and economic stability in assessing their investment strategy – be that in property or business. CKD Galbraith is embedded in Scotland, we operate from our Scottish offices and, while we are active south of the border, our investment remains firmly committed to Scotland.
Richard Higgins is in charge of the commercial investment and agency division. richard higgins@ckdgalbraith.co.uk 01786 434625
www.ckdgalbraith.co.uk | Twitter: @CKDGCommercial | Commercial Matters Summer 2016 | Page 7
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DEAL round-up Energy tenant for London House
CKD Galbraith has secured a new tenant at London House, 20-22 East London Street, Edinburgh. Dunelm Energy has taken the ground floor suite of 1,045 sq ft at £13.50/sq ft as their first official Edinburgh base. The company is headed up by Iain Marchant, former CEO of SSE.
Music charity doubles space at Granton Fischy Music has expanded into a double unit of 1,453 sq ft within New Broompark, Granton in Edinburgh. CKD Galbraith acted on behalf of the landlord to organise a simple unit switch with a rent increase in line with the increase of space. The vacated 730 sq ft unit has since been let to Fortitude Coffee.
First Edinburgh office for LetsJoin On behalf of a private landlord, CKD Galbraith has let suite 17/1 at Silvermills Court, New Town, Edinburgh to LetsJoin for their first office outside London.
In brief
The provider of wifi-based infotainment has let the 1,733 sq ft first floor suite with quirky mezzanine on a fiveyear lease.
l Healthcare Europe has taken the ground floor of Thain House, 226 Queensferry Road, Edinburgh, which extends to 1,463 sq ft.
Glenorchy House secured for Firstport CKD Galbraith has concluded a lease with Firstport on behalf of landlord C & W Assets Ltd for the part first floor at Glenorchy House, Union Street, East Edinburgh. The agency has taken the 1,536 sq ft space on a 10-year lease with a five-year break at a rent of £15.50.
Inveralmond, Perth.
l A double unit (5,000 sq ft) at Tweedbank Industrial Estate in Galashiels has been let to TMS Motor Spares. Thain House, Edinburgh.
Starbucks secures ground lease in Perth Acting on behalf of landlord Balformo Enterprises Ltd, CKD Galbraith has disposed of one acre of land at Easter Inveralmond, Perth, on an annual ground lease for 99 years to Starbucks for £20,000 per acre per annum. CKD Galbraith is marketing a prominent 12-acre site for commercial use adjacent to the Inveralmond Roundabout in Perth. A further 5.50 acres is under offer to two national operators and about three acres are still available.
l A former Jessops retail unit at 44 Union Street, Inverness, has been sold to a private individual for £155,000 on behalf of a private landlord.
20 Duke Street, Huntly.
Silvermills Court, Edinburgh.
l On behalf of landlord Red Square, CKD Galbraith has let Block 2, which extends to 979 sq ft, to office furniture manufacturer DS2 at Duckburn Industrial Estate in Dunblane. The passing rent of £6,853 equates to £7/sq ft. l CKD Galbraith has sold 20 Duke Street, Huntly, to a private individual for £100,000. l Acting on behalf of property trustees, CKD Galbraith has secured a private sale of 18 Dublin Street, Edinburgh. The new owner began converting the former townhouse into five flats in April.
Current commercial property rentals and yields ABERDEEN
Prime headline office rents
Prime net initial yields
Industrial prime headline rents
Yields
£32.00 psf
6– 6.25%
£9 psf
6%
£29.50 psf
5.25 – 5.50%
£7–8 psf
6.5%
£32.50 psf
5.25%
£7–8 psf
6%
GLASGOW
EDINBURGH
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A Week in the Life of a...
Building Surveyor with Martin Cassels
Sizing up property Katie Gibson discusses the International Property Measurement Standards.
Global research has shown that a property’s floor area can vary by 24% across countries. The effect? It becomes difficult for international occupiers and funds with global portfolios to accurately compare space. The aim of IPMS is to provide a consistent measurement for property professionals and give greater credibility to valuation. So, what does the IPMS cover and what does it mean for the agents and prospective tenants on the ground? The new measurements are: IPMS 1: The sum of the areas of each floor level of the building measured to the outer perimeter of external construction features and reported on the floor-by-floor basis. IPMS 2 - Office: The sum of the areas of each floor level of an office building measured to the internal dominant face and reported on a component by component for each floor of the building. In many markets, but not universally, this is known as gross internal area. IPMS 3 - Office: The floor area available on an inclusive basis to an occupier but excluding standard facilities and shared circulation areas, and calculated on an occupier-by-occupier or floor-byfloor basis for each building. This was known as net internal area. The issue many surveyors have is that the new IPMS are focused on shiny new square buildings without columns, thick walls or period features. In practice, pre-2000s
and traditional buildings don’t fit this description. A prospective tenant wants to know how much useable space they have to make money from. If a thick stone wall is included in the measurement, it doesn’t help management understand the available space in the property. The danger is that it can make the profession seem more complicated and affect trust between occupier and landlord. Changes to norms can take a long time to embed. Metric
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A prospective tenant wants to know how much useable space they have to make money from.
measurements are a good example: While we have to report and advertise everything in square metres, we continue to talk in square feet and quote square feet in all written documentation. The market norm of measuring in accordance with the RICS 6th edition of measurement practice and providing IPMS measurement upon request will remain. Though to date I have not been asked for IPMS measurements. Katie Gibson works in the commercial agency team. katie.gibson@ckdgalbraith.co.uk 0131 240 6981
People confuse my job with valuing houses. They couldn’t be more wrong. I’ve been a building surveyor for 21 years and love the variety of work and wildly different locations we work in. The best part is bringing a derelict building back to life and looking amazing after all the trials and tribulations involved in its re-birth. Monday: The morning is taken up with team workload planning and deadlines and catching up on emails. Then it’s off to a meeting north of Edinburgh to sort out a new electrical supply for a project. Dealing with utilities is always challenging. I cover some rural properties as well as commercial, but the problems are the same. Tuesday finds me in Edinburgh meeting another project manager. They’re representing the landlord in a turnkey refurbishment and fit-out project for our client, the tenant. The property is a Category A listed townhouse. We’re agreeing the finer points of specification and detail so that both parties know what they’re doing and getting. Afterwards I meet an office furniture provider to discuss what works with our space plan for the client and how funky we can actually make the furniture in an A-listed building. Wednesday: I’m on the road to Inverness at 6am for a day of two halves. I’m negotiating and monitoring an interim dilapidations with the tenant of an industrial unit in a tired building in a fairly grotty industrial estate. In contrast, my afternoon meeting with a contractor is at a picture-perfect estate in the Highlands where I’ve been organising some stone repairs, repointing and internal refurbishment of a gate lodge and project managing the installation of a new water source heating system in a baronial castle. THURSDAY: After proof-reading a building survey report for an acquisition, I’m back in the car to Dunfermline. This time it’s a retail premises where contractors are stripping out and dealing with drainage problems. A pair of good site boots is a must – plus a strong constitution – in this job. Friday arrives too fast. It’s a rare day in the office. I finalise a reinstatement cost assessment for insurance for an office building in Glasgow then squeeze in a fee quotation for a potential building survey next week in London. Martin Cassels is in charge of CKD Galbraith’s building surveying team. martin.cassels@ckdgalbraith.co.uk
0131 240 6992
www.ckdgalbraith.co.uk | Twitter: @CKDGCommercial | Commercial Matters Summer 2016 | Page 9
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2016 Event Calendar
Calum Innes explores the consequences of removing business rates relief for industrial property and other impending changes to the rating system.
We would be delighted to see you on our stand at any of the following events. May Beef Expo Agricultural Business Centre, Bakewell, Derbyshire May 20 Fife Show Kinloss, Cupar May 21 June
Rate relief cuts raise awkward questions Business rates are part of the general overhead for any business which occupies property in the course of managing its affairs. However, as a consequence of government policy they are also a cost of not being in business.
Royal Highland Show Ingliston June 23 to 26 July
GWCT Game Fair Scone, Perthshire July 1 to 3 Border Union Show Kelso July 29 and 30 August Moy Game Fair August 5 and 6 October Stirling Bull Sales United Auctions, Stirling Agricultural Centre, Stirling October 16 to 18 November Agriscot Highland Hall at The Royal Highland Centre, Ingliston November 16
Commercial property which falls vacant is already liable for business rates under measures introduced by the Scottish Government. Short-term relief of 50%, is granted for the first three months. Thereafter 90% rates are payable.
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Since April 1, industrial property – which was previously exempt from business rates while vacant – has also become liable at the 90% rate, although 100% relief will be granted for the first six months. However, beware if an
There appears to be little evidence to support the idea that taxing vacant property drives effective occupation. industrial unit has been vacant prior to April 1. It will only receive up to six months full relief then 10% relief going forward. For example, if a building was vacant from December 1, 2016 it would only receive two months' void relief at 100%. The rationale for these changes is to provide drivers to rejuvenate Scotland’s high streets and wider economy, and reduce the number of empty properties. The assumption behind this is that property owners may be tempted to leave properties empty while waiting for high rents to be offered. Landlords, however, do not make the market, and tenant demand arises from wider economic forces. There appears to be little evidence to support the idea that taxing vacant property
drives effective occupation. At the time of writing, market commentary suggests removing industrial rates relief may result in vacant property being demolished to avoid taxation. We will have to wait and see, but there is evidence that imposing vacant rates has resulted in landowners constructively vandalising commercial property to make it incapable of occupation. Pressures on the public purse mean that the Scottish Government is reviewing its rating policy for other sectors. Renewable energy developments are due to pay significantly increased rates, while, from a rural perspective, the government is reintroducing sporting rates, which will require all shootings and deer forests to be valued and entered in the valuation roll from April next year. Business rates have been a factor of UK taxation since the middle of the 19th century when all lands and heritages fell to be valued and subject to taxation. Since then, certain classes of property – such as agricultural and forestry – have been exempted. Various fiscal reliefs have also been granted, such as the Scottish Government’s small business bonus scheme, which removes rates liability for smaller commercial properties albeit this is paid for by a surcharge on larger properties. Any form of relief or exemption is a market distortion, so the tax burden becomes skewed to those sectors which don’t receive it. This affects occupier behaviour, which is perhaps an unintended outcome of political tinkering. The effect of these most recent changes is yet to be seen, but it is clear that the rating playing field is somewhat uneven. Calum Innes provides commercial and planning consultancy services. calum.innes@ckdgalbraith.co.uk 01738 456075
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New senior appointment to Stirling office Jamie Grant, left, has been appointed as Senior Planner to work on a wide range of commercial, rural and renewables planning projects for our clients across Scotland. With a background as a chartered town planner, Jamie also has considerable experience in renewables. He joins us from BayWa r.e. where he was instrumental in the company’s entry into the UK onshore wind development market and contributed to the acquisition and delivery of the Fraisthorpe development in the East Riding of Yorkshire.
Before that, Jamie spent four years with Infinis as project director covering a broad portfolio of onshore wind farm development assets, including securing the consent for the 21-turbine A’chruach scheme in Argyll. These roles built on his planning background and his experience gathered as a consultant focusing on energy and waste applications with Terence O’Rourke Ltd. jamie.grant@ckdgalbraith.co.uk 01786 434638
Rising to a refurb challenge Peter Scott Aiton explains why vision and collaboration are key in refurbishment projects. The bright new interior of Glasgow’s Culzean Building, above, makes use of the full-height windows, compared with the previous arrangement, left.
CKD Galbraith’s commercial team works closely with the building surveying team to ensure that everything is in order with a building at lease end. The level of refurbishment required to make sure a property can be marketed efficiently varies a good deal, depending on the type of property and the wider market. A good ‘big picture’ understanding is essential to make sure that the refurbishment meets market demand at an affordable cost. It takes a commercially astute building surveyor and co-ordinated input from letting agents, asset managers and managing agents to strike this balance. Often the ideal is found to be unaffordable, and it is the job of the building surveyor to lead the value engineering exercise to find the right product at the right price. Refurbishments are always challenging as the original building features can be physically restraining. Floor to ceiling heights are always a hot topic. Achieving modern requirements in an old building with low slab-to-slab heights, while fitting in all the required mechanical and electrical equipment, is a real juggling act. A compromise is usually needed, so good co-ordination of the design team is critical to make the most of every last millimetre the building has to offer. We undertook a textbook example of how existing structures can limit ambitions when we led a major refurbishment of The Culzean
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Good co-ordination of the design team is critical to make the most of every last millimetre the building has to offer.
Building, a listed office building in Glasgow’s city centre. Having co-ordinated an intensive design that offered everything required in a competitive market place, we found we were slightly below the best practice floor-to-ceiling height recommendations. Our role as project manager and lead consultant was to have the vision to lead the process and drive each member of the team to the best possible result. We chose to turn our disadvantage into a positive by making the most of the full-height feature windows and packing all the M&E into a flexible central area. The result was a resounding success and shows how collaboration can revolutionise a refurbishment project. Peter Scott Aiton, part of the building surveying team, undertakes commercial projects and professional work. petersa@ckdgalbraith.co.uk 0131 240 6967
www.ckdgalbraith.co.uk | Twitter: @CKDGCommercial | Commercial Matters Summer 2016 | Page 11
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our expertise l Property management l Asset management l Commercial valuation l Professional services l Investment consultancy l Sales, lettings & acquisition l Project co-ordination l Building surveying l Facilities management In addition to our specialist services, we manage in excess of £450 million of commercial property across the UK. We deal with around 750 tenants in more than 120 properties from single units to large multi-let environments such as shopping centres.
contacts Kash Bhatti Property Management, Facilities Management kash.bhatti@ckdgalbraith.co.uk 0131 240 6970 Colin Black Property Management 0131 240 6971
colin.black@ckdgalbraith.co.uk
Martin Cassels Building Surveying 0131 240 6992
martin.cassels@ckdgalbraith.co.uk
Jill Gayford Property Management 0131 240 6987
jill.gayford@ckdgalbraith.co.uk
Katie Gibson Agency (office, retail & industrial) 0131 240 6981 katie.gibson@ckdgalbraith.co.uk Jamie Grant Planning 01786 434638
jamie.grant@ckdgalbraith.co.uk
Pamela Gray Asset Management, Professional & valuation, Property Management pamela.gray@ckdgalbraith.co.uk 0131 240 6963 Richard Higgins Agency (investment, office, retail & industrial), Asset Management, Professional & valuation 01786 434625 richard.higgins@ckdgalbraith.co.uk Calum Innes Planning, Project development & co-ordination calum.innes@ckdgalbraith.co.uk 01738 456 075 Pam Over Asset Management, Project development & co-ordination, Property Management 0131 240 6965 pam.over@ckdgalbraith.co.uk Peter Scott Aiton Building Surveying 0131 240 6967
peter.scottaiton@ckdgalbraith.co.uk
Harry Stott Agency (development, office, retail & industrial), Planning, Professional & valuation 01786 434630 harry.stott@ckdgalbraith.co.uk James Taylor Building Surveying 01786 434610 Mark Thom Professional & valuation 0131 240 6997
james.taylor@ckdgalbraith.co.uk
mark.thom@ckdgalbraith.co.uk
Offices across Scotland | Sales & Lettings | Farm & Estate Sales & Acquisitions | Commercial | Rural | Energy Forestry | Property & Land Management | Sporting | Agricultural Loans | Subsidy Trading & Advice
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