Working in partnership with you We want to provide spaces and a service that supports diverse and independent businesses
Rents & Leases
• We want to provide spaces and a service that supports your businesses, whilst also achieving market rents through a clear and transparent rent review and lease renewal process. • We will outline our rent review and lease renewal processes in our updated Handbook. In clear simple language, we will set out the steps of the negotiation process, outline the options available to tenants and sign-post tenants to advisory support available from a number of tenants and SME business groups. • We know that some tenants might have affordability issues. In these specific cases, we are committing to work with long-standing small businesses, including not-for-profits, on an individual basis to agree suitable rent profiles. These are businesses that have occupied Arch Company properties for 10 years or more; over 1,400, more than 40%, of our tenants are long-standing businesses. • We may, for example, introduce stepped rent increases, turnover leases or support arch relocation. These options will be included in the revised Handbook but specifically for tenants who evidence affordability issues. We will ask tenants to provide financial information where possible to help us understand their affordability. • The inherited backlog of rent reviews will take time to work through but we aim to have contacted all affected tenants by the end of 2019, and to have cleared 80% of the backlog within 12 months, other than those cases which are in legal dispute. • We are in the process of recruiting several new team members to expedite the rent review process and we will keep tenants updated on our progress. We are striving to have timely and efficient rent reviews and lease renewals going forward but this is dependent on clearing the inherited backlog. • For lease renewals that are contracted out, we will indicate in writing whether we are able to grant a new lease 6 months before the due date and clearly set out next steps with you. We will endeavour to begin formal negotiations at least 3 months before your lease renewal date. • We will make contact 6 months before any rent review and aim to serve formal notices at least 3 months before the rent review due date. • It is in our interest as a commercial landlord that our space is as attractive as possible for our tenants. A key part of this, particularly for our small business tenants, is that they have as much certainty as possible about the future of the business which is their livelihood. Therefore, in October 2020 we will review and report upon how we have performed against these commitments on rent review and lease renewal timing with an aim of increasing the level of certainty that we can give to tenants at a point at least 6 months before the lease event. • We will support tenants who want to be in the arches for the long-term. For new tenants and where leases are up for renewal, we will try to agree leases up to six years and in some cases may be able to extend further. These leases may contain landlord breaks and tenant breaks. We will also work with tenants who prefer shorter-term leases. • We will set out our estimated fees that will be payable by tenants in writing, by letter or email, and in advance of any transaction.
Notifications
• We want to provide reassurance around how our notices are received, particularly concerning rent reviews. We will ensure that rent review notices are sent recorded delivery and we will set out the process in the revised Handbook. Preserving communities of diverse independent businesses • We are sympathetic to enabling family succession of businesses. If the family business succession requires a new lease to be granted to a new person who is not the tenant under the existing tenancy, then it may be subject to headlease constraints. The headlease is the underlying lease between The Arch Company and Network Rail who still retain the freehold for the estate. We will evaluate individual
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