Getting a grip on your assets

The term ‘green shoots of recovery’ is bandied about a lot at the moment, however it is still too soon to say that the economic crisis is over - particularly for the commercial property sector. As such a positive, forward-thinking attitude is necessary to guide us back to financial buoyancy.

 

Many are still in the depths of a recession, bringing to the fore the importance of asset management to ensure property owners are accounting for every penny.

 

Businesses today still continue to suffer owing to the all-time high bank lending of the past, coupled with declining asset and property values. Some property owners have now come into difficulties after the Government introduction of pre-package administrations which was introduced to essentially protect people’s jobs from insolvency or liquidation.

However, the advent of these ‘pre-packs’ has led to some businesses shedding unwanted and unprofitable properties. As a consequence, landlords are finding that they are losing large amounts of income through the loss of tenants, brought about by these pre-package sales. This has caused further financial dilemmas and for these companies in particular, expert guidance and asset management is crucial in ensuring that they are getting the most, whether it’s savings or revenue, out of every last piece of property stock.

 

With so many potential hurdles, flexibility on the part of the tenant and the landlord is crucial to help cash flow and improve the situation for both parties. This can involve controlling service charge costs and re-tendering maintenance contracts annually as opposed to every three years.

 

For firms trying to ready themselves for the best possible start to 2010, there are a number of areas to be considered as part of a rethink on asset management.

This month, the new rateable values list was released, so now is the time to make sure the rateable value on a commercial property is as low as possible.

 

Thanks to 100% rates relief for 2009/10 on properties with rateable values of less than £15,000, it may be possible to break down portfolio assessments into smaller, manageable chunks and take advantage of this scheme.

For those with a large number of properties to cover, owners that are flexible are going to be the real winners here. We are advising some clients to get strategic and develop a system where they can move their stock around on a regular basis, in order to minimise their rates liabilities.

 

Temporary lettings to charities have also proved a popular way to manage and maintain dormant units. This is because charities are entitled to 80% mandatory rates relief while in occupation.

And, if a commercial property has undergone physical changes, such as the demolition of an area or a change in occupation, upon proof of this the valuation office will revise the rateable value and this could save significant amounts in 2010.

Planning can be a confusing stumbling block for many, due to its complex nature and terminology. However, recent changes in legislation and can now bring about substantial savings. Introduced earlier this month, planning permissions that are about to expire can now be extended, which is welcome news to developers who may have lost their valuable planning consents.

 

This new process allows applications that have not lapsed to be kept alive via a simplified application procedure that will now cover all eligible permissions, not just major developments. The extension also applies to listed buildings and conservation area consents. It will also be possible to apply to make non-material amendments to existing planning applications. Sanderson Weatherall has been advising clients on how to go about extending the lifespan of consents, ensuring that they are in the best possible shape for when the market returns.

 

Flexibility really is the key in this current climate. Re-visiting asset management, rating and planning are just a few areas where businesses can save. It’s hugely beneficial and will make a significant difference to the bottom line, ensuring your commercial property is fighting fit for 2010.