June 2012: Gilbert Evans recently represented Johnsons Shoes at arbitration on a rent review for a property located within the heart of the King Edward Court shopping centre in Windsor. The property comprises a double shop unit with 2,900 sq ft of ground floor sales with ancillary mezzanine and basement, a very prominent return display frontage and an internal change of floor levels within the retail area. Other nearby national multiple retailers include Waitrose, Zara, Top Shop, Next, and White Stuff.
With a passing rent of £157,500 pax, Gilbert Evans argued that no increase was justified, despite the landlord’s surveyors seeking a revised rental of £176,000pax.
The arbitrator awarded £147,500 per annum. Up to the point of this rent review and arbitration award, all other contemporary rent reviews in King Edward Court Windsor had been agreed, or subject to arbitration awards or expert determinations at increased rental levels. Gilbert Evans won the first nil increase award within the shopping centre.
Our winning arguments included:
• The appropriate method of valuation – the lease directs that the property is to be valued as a whole or in the parts as permitted by the lease, whichever gives the highest value. The arbitrator agreed with our argument that the unit should be valued as demised i.e. as two separate shops occupied under a single lease, with an allowance applied to one of the retail units to reflect management and voids.
• The appropriate Zone A Rate – the available evidence required a forensic level of analysis to establish all the facts. All the available evidence required adjustments to the analysis so that all the evidence was approached on a uniform basis. We argued in our submissions that the appropriate Zone A rate was £107.00. The landlord argued for a Zone A rate of £118.50. The arbitrator awarded a Zone A rate of £110.00
• The appropriate addition for return frontage – the return frontage, whilst very prominent, is fragmented and there is also a change of levels and a restriction on display signage other than on the glazed areas. We had argued that an addition of 6% was appropriate. The landlord argued for an addition of 10%. The arbitrator awarded 6%
• The appropriate allowance for floor level changes and configuration – Unit 23 has a floor level change within the remainder zone, and Unit 23 a level change within Zone B. In our submissions we had argued that an allowance of 2.5% should be applied to Unit 23 and 10% applied to Unit 24. The landlord argued that no allowance was due. The arbitrator’s award was based on allowances of 1.5% and 8%.