There's been a lot of interest recently in the rents payable for commercial properties that we own in some parts of Borehamwood, such as Leeming Road and Aycliffe Road.
Our Head of Engineering Services and Asset Management, Simon Payton, has given us the following comments to provide you with more background information:
“We have a healthy occupancy rate of the commercial premises that we own (averaging at 98%)and we see interest growing from retailers looking to rent our properties for five to 10 years or more. That’s the case both in the Leeming and Aycliffe Road areas of Borehamwood as well as elsewhere in the borough.
As each tenant will be aware, rents can be reviewed individually every five years in line with the rental agreements for the properties.
With the high occupancy rates and demand for properties in the area, market forces of supply and demand will inevitably have an impact on rental values. We’re also under a statutory obligation to achieve ‘best consideration’ on behalf of local residents, which is determined by commercial market evidence and conditions.
That said, we refute the suggestion that any of our commercial tenants would face a 400 per cent increase in their rental figures as has been suggested. That figure has been quoted anecdotally in relation to one business previously based in Leeming Road. This tenant was persistently late in the payment of rent and needed a lot of officer intervention to ensure the rent was paid (at the rate prior to any lease renewal). Regrettably we were left with no alternative but to object to a lease renewal and served notice on the tenant, leading to a court order giving us possession of the property. At no time was the tenant offered a new lease at a 400 per cent increase as suggested.
There have been suggestions that there was no interest in this shop and that it had therefore been leased to a charity with an 80% discounted rent. This is not the case, there was significant interest in the premises with seven businesses viewing it. It was considered that a national charity would bring a new use to the parade without competing against existing retailers while generating 100% of the market rent. There could be some confusion here because charities can get relief on business rates, however in the case of this shop there are no rates currently payable due of the Small Business Rate Relief scheme, regardless of business type.
Rents in the area are competitive and we will continue to ensure a balance between supporting and encouraging local business and achieving best value by taking a professional and market driven approach to renting the assets that we own, for the benefit of all our residents.”
Posted on Monday 4th September 2017