Property and Asset Management Strategies in practice Aims 1. To provide students with an understanding of the legislative matters around commercial property, leasing/letting, covenants and property management 2. To enable students to develop the practical and entrepreneurial skills appropriate to the commercial property industry Knowledge and Understanding 1. Identify the key issues affecting the management of commercial property 2. Identify and employ appropriate research techniques to apply to the task 3. Explain and understand key fundamental legal and strategic principles 4. Appreciate the importance of an organised property and asset management plan Practical, Professional or Subject Specific Skills 5. Using analytical and research skills to draw conclusions on how to manage a commercial property portfolio 6. Ability to interpret property management strategies to provide informed advice 7. The use of logical analysis skills to determine data that will support your findings 8. Professional judgement in determining how much case law, regulations and legislation have on property and asset management decisions Transferable Skills and other Attributes 9. Develop independent learning skills 10. Develop and demonstrate written communication skills 11. Employ research skills using a range of printed and electronic data sources Assessment Brief/Task Local authorities have been purchasing property assets across the UK and in 2019, they spent over 235m buying struggling shopping centres. According to Knight Frank, this expenditure accounted for 36% of all the retail transactions, which were completed. Councils have a responsibility for their area and its residents, so this tactical strategy, to help prevent the decline and loss of local facilities and services is understandable. A Chief Executive has recently stated that this approach will open up opportunities to shape the future of our city centres over the long-term with decisions being taken by Councils who are working on behalf of their residents, as opposed to investors whose interests do not necessarily align with those of the district. Hulme City Council have adopted this approach and duly completed in 2020, the purchase of the following asset: A 1960s purpose built shopping centre, comprising 12 retail units, situated around a shared forecourt, with a multi- storey car park for 150 vehicles. The facility is in the high street, opposite a transport interchange (bus, rail, metrolink services) and has the benefit of a large service yard, toilets and baby changing provision, management/security office and a food court. The previous managing agent confirmed that there is a service charge, but that this has not been reconciled to date. There are also 4 vacant units, significant rent arrears, and reports of broken tiles in the forecourt and sightings of vermin in the car park. The client has not been provided with any inspection records or tenure arrangements. The shopping centre has experienced a significant decline in performance, because of recent store closures, lack of footfall due to Covid- 19, increased business rates and from the dramatic increase in online shopping. The local authority now realise that they do not have the specific, in house property asset management expertise and resources to address these problems. They have therefore obtained approval to approach your property consultancy with an initial instruction to provide advice on how they can reverse this short-term loss of value, increase the income stream, and ensure good asset performance and rental growth in the future. Part 1 -The client has requested that you advise them on the property management matters which they now should immediately address to ensure that the shopping centre remains compliant with statutory legislation, maintains an income stream, and reduces its operational costs. (ILOs 1,6,8; 750 words). Part 2- Tenancy documentation has now been retrieved for the occupied properties. The client would like to extend your remit to provide specific advice on the legal significance of the existing arrangements for three specific interests, having regard to the relevant areas of landlord and tenant law and practice. They also seek your brief recommendations as to how their performance could be improved: Unit 6 Hulme Shopping Centre: Tenant: Primstark Use: Department store Lease: 15 years on FRI terms with effect from 01/11/2016 Notes: Protected lease Passing rent 90,000 ; Current rental value 85,000 Anchor tenant 5 Year upward only rent reviews Time is of the essence for the service of LLs notice 6 months of rent arrears and service charge payments Trading but surplus space and considering a relocation Unit 12 Hulme Shopping Centre (Food Court): Tenant: Mctavishes Use: Hot Food takeaway and caf. Lease: 3 years on FRI terms with effect from 01/03/2019 Notes: Passing rent 25,000 ; Current rental value 28,000 pa Protected Tenancy Tenant wants to renew and served a S26 notice on 01/09/2021 Rent and service charge are fully up to date Frequent complaints of blocked drains due to grease and litter in service yard Two other vacant units in the food court Ist/2nd Floors Hulme Shopping Centre (Car Park): Tenant: Z Parks Ltd Use: Car park and valeting facility Lease: 10 years on FRI terms with effect from 01/12/2012 Notes: Passing rent 15,000 ; Current rental value 30,000 pa Protected tenancy 150 car parking spaces; 25% occupancy rate Landlord wants to secure possession for redevelopment Tenant in continued occupation since 1985 (ILOs 3,5,8; 1500 words) Part 3 – The client would now like to have a strategy for this shopping centre asset, to ensure long term growth, regenerate the High Street and maintain this essential local facility. They have asked you to help them put together an Asset Management Plan, in the context of the five steps of effective asset management, to achieve the following objectives: Increase income Reduce operational costs Identify development/asset enhancement opportunities Risk mitigation measures Facilitate collaborative working and secure external funding (ILOs 1,3,4,8; 750 words) The client should be provided with your advice in the form of a report. This should refer to the current relevant legislation and property asset management policies and procedures in England. The introduction, conclusion, contents page and any referencing will be excluded from the required word count. Additional information should be presented in an appendice and you are encouraged to put forward your views and opinions from your research. Hulme City Council and the individual property interests are all fictional. Please always ensure that all the required tasks in the clients brief have been addressed and that you fully accord with the required word count for each specific task. Please support all work using appropriate references. You should use the APA 7th Harvard Style in your submission. Assessment Criteria Item Mark Advice on the immediate property management matters and risks 25% Analysis and reasoned proposals for three specific properties 40% Guidance on an asset management plan and future strategy 25% Presentation and referencing 10%Show more
