Latest Thinking on Occupying Commercial Property

Speakers

Ian Mcrae
Chairman of the RICS Commercial Property Faculty Board
Chadwick McRae

Howard Cooke
Partner
GVA Grimley LLP

Michael Fenwick
Assistant Director
PricewaterhouseCoopers

Prof Virginia Gibson
Professor of Corporate Real Estate
Land Securities Trillium Fellow
Dept of Real Estate and Planning
The University of Reading Business School

Julian Lyon
Manager, European Real Estate
GM Worldwide Real Estate

David Mills
Director, Corporate Real Estate Consulting
Nelson Bakewell

Peter Millwood
Principal, Tax Depreciation
Deloitte & Touche

David Montgomery
Partner
Kingston Smith LLP

Gary Moss
Partner
Davis Langdon

Richard Taylor
Managing Director
CORPRA

Understanding how to make the Lease v Buy decision. Why the comparison must be made in terms of monetary value. How to make the comparison. Putting a monetary value on the effect
• The key determinants in the decision making process
• Cashflow analysis of the options
• How to compare the options based on financial criteria 
• What will be the balance sheet implications of the lease versus buy decision
• How important are business implications of the buy versus lease decision

The ideal lease that the landlord would love you to take - why you should not take it and the costs if you do
• The Landlord may want you to take a lease:
- at the best rent in the market
- for the longest possible length of time
- with minimal management input from the Landlord
- with upwards-only rent reviews
- on a full repairing and insuring basis so you improve the space
• Once you're hooked you stay hooked!
• The Code for Leasing Business Premises in England and Wales 2007
• The Service Charge Code 2006
• Getting what you are paying for
• Paying for no more than the value you get

What can be improved in the lease terms and calculating the monetary value of achieving those improvements
• What to ask for in the lease terms and calculating the monetary value of:
- achieving flexibility of use, occupation and disposal
- ensuring the lease fits with your business
- avoiding improving the owner's property at your cost
- sharing with customers and suppliers

The Price of Risk:  what are the risks, where do they come from, and what is the impact on occupiers' and landlords' decisions?
• Defining the sources of risk for both the occupiers and tenants
• Understanding the risk of an individual transaction in the context of a portfolio
• How can we price this risk - is there a robust approach?
• Making the choices - avoiding comparing chalk and cheese

Factoring in the implications of tax I - What taxes have application, to whom do they apply and what is the cost?
• Corporate accounts and the impact of presentation on the quantum of tax   payable
• Direct taxation
• Capital Gains Tax
• Choice of entity in which to hold the property
• VAT implications
• Stamp Duty Land Tax

Factoring in the implications of tax II - tax allowances and grants - who can benefit from them and in what measure?
Tax Allowances
•  Factoring in capital allowances
•  Taxation of lease inducements
•  Contributions to fit outs
•  Dilapidations
Grants
•  Grant funding in the UK
•  Am I eligible?
•  How much support will I get?
•  How do I apply?
•  Key factors for a successful application

So what does the transaction, whether purchasing or leasing, do to the Balance Sheet?
• Purchasing or leasing - what is the effect on or off the Balance Sheet

Understanding and pricing the costs of refurbishment and obsolescence
• Key issues in the pricing of refurbishment & obsolescence works
• What drives obsolescence and how to future-proof your properties
• How to budget and plan for future refurbishment and renewal works
• A whole life cost approach and its relevance to owned and leased properties

Where does flexibility reside? What is flexibility worth? What is the fit between the business plan and the building plan?
• Flexibility from market liquidity
• Flexibility by procurement and exit provisions
• Flexibility by aligning commercial interests
• Flexibility - costs and values
• Who pays and who benefits

Surplus buildings - How to mitigate your liability
• What is Surplus Property?
• Financial issues
•  FRS12/IAS37
•  Managing The FD
• Subletting - Mitigating the Downside
•  Know your property
•  Know your market
•  Know your agent
• Portfolio Options

So should you buy or rent? How to put all the information together, weigh one side against the other and assess which is the better option
• The first things to consider
• Evaluating the pros and cons against your business needs
• What can the demand and supply sides do to achieve a break through?
• What can be done to accelerate changes in the supply side?
• What more should occupiers be doing to help themselves?
• What is the future for regulatory and government intervention?
• Do accountants distort the property market?
• Bringing down the cost of buying or taking a slice of the developer's cake - when is it possible? How much is possible?