Let the Legacy continue says John Thornley, Managing Director: Fairhurst Estates Ltd:
Isn’t it great to be British after such a successful London Olympics? And what an uplifting experience the games have proved to be! We all experienced national pride and basked in the glory of ‘Super Saturday’ and the successes of team GB while the patriotic flag waving temporarily distracted us from the difficulties of the Euro crisis and the double dip recession.
Britain has proved she can organise an event to match any in the world and is now ready and waiting for future international opportunities. The significant investment in infrastructure with world class facilities created close to a major conurbation will enhance the opportunities to inspire future generations yet without the catalyst of the Olympics these facilities would never have transformed and brought life to a wasteland in East London. With a truly global audience, the historical venues featured during the Games and for victory ceremonies showcased London magnificently, marketing Britain as a great tourist destination in coming years. The whole scheme – which many sceptics had considered a might ambitious – was built on time and within budget while all the fuss over G4 and security was soon forgotten as the Game Makers and armed forces were simply brilliant.
Britain is on a high and long may it continue. Yet in stark contrast to the inspiring athletes who work so hard to achieve their gold, the public perception of the banking industry could not be at a lower point. The term “fat cat” seems to resonate with the majority of the public’s view of those who perch high on the financial podiums; add to that the almost continual use of phrases such as “deleverage,” “de risk,” and the message is coming over loud and clear – the banks don’t want to lend!
But as we strive to keep the Olympic legacy torch burning, there are some sparks of more positive news. The Co-operative Banking Group’s proposed purchase of the Lloyds branches will create an ethical yet dynamic presence in the high street; the banks are slowly learning from their mistakes of the past and realising that lending to SME’s is not only profitable for them but will enable companies to invest in their businesses which benefits the economy as a whole. We need to see more fit and healthy competition in the market; players who will keep up the momentum and yet it is difficult whilst the FSA seem to create as many hurdles for entrants as possible. Essential TV viewing for all politicians and learned bankers should be Dave Fishwick (Bank of Dave) – one man’s determination against the odds to open a bank for the people of Burnley.
So perhaps another legacy of the summer’s most amazing event should be our willingness to change; we should be determined and nimble enough to adopt an alternative approach for a better result. The majority of Fairhurst Estates (FEL’s) clients are occupiers/tenants of property throughout the UK; everyone knows business is incredibly demanding and what we have seen is a shift in our work that reflects the economic climate of today. Typically we would have been carrying out numerous rent reviews on behalf of clients but we have seen this work virtually dry up. Fundamentals have shifted: where at one time power lay with the landlord it is now held by the tenant.
A recent example affected Fairhurst Estates Limited (FEL) client Handlesbanken.
Handlesbanken are the occupiers of a Condie owned property on the Acorn Business Park. Their lease contained a break clause which could be exercised in August 2013. FEL acting on behalf of Condie investments approached Handlesbanken and agreed a deal to wave the break clause and extend the lease for a further five years beyond the original break option date.
FEL achieved this outcome by being proactive. They communicated with the tenant to discover what they liked about their location and how concerns if any could be overcome. It was discovered that a slight lack of parking was a problem, this was overcome by a re allocation of spaces at a neighbouring office unit. A final deal was secured by offering a six month rent free period and two additional parking spaces.
By communicating and listening to customers’ needs all things become possible, the landlord has a guaranteed strong covenant for many years to come and the tenant continues to be happy with their office location. They have saved money throughout the rent free period and have easier parking.
Depending upon the length of time you are prepared to commit to the property will be the delivery factor on the level of incentive that can be negotiated.
Incentives can take different forms. It could be investing in the building, such as upgrading the customer facilities at no cost to the tenant. The landlord will see the benefits of this investment as in some cases it can lead to an increase in capital value which leads to a win/ win situation. A bit like team GB!