Expense Reduction

Analysts

Your Property Team

find extra profit

2 Quick Reference

Introduction 3Strategic Property Costs Review 4Business Rates 6Rent Reviews & Lease Renewals 8

Dilapidations 10Aquisitions 1210-Stage Acquisition Process 13Corporate Property Advice 16

Quick reference

Introduction 3

Conventional property advice often focuseson individual services that do not necessarilytie into a coordinated approach and do not always match the Client’s expectations. We will, where appropriate and if requested,always refer back to how the subject activities reflect the business objectives, not just in the short-term but also over the medium to long-term.

Our Property Team maintains a focus on bestvalue and this can be demonstrated throughsimple comparison tools to ensure your

property costs and exposure match yourbusiness needs. As we are part of ExpenseReduction Analysts, ongoing property costs is a constant driver of our service whetherwe are handling business rates, dilapidations,rent reviews or acquisitions.

Furthermore, this carries through to our feebases which will always be offered to you including a results basis. This cost focusedapproach is the ethos of the network andclearly demonstrates that, together, we can achieve significant savings.

Introduction

Expense Reduction Analysts Property offers a dedicated range ofservices specifically tailored to occupiers. We have no allegianceto landlords and developers and can therefore be confident thatother competing interests do not influence our efforts.

In the current market you might well be affected by economic uncertainty and therefore you may wish to consider reducing your property costs.

Our property experts can undertake a reviewof your properties to identify opportunities toreduce ongoing costs through, for example,identifying and disposing of surplus space,advising on new working practices that reduce the need for space, renegotiatingleases or mitigating dilapidations liabilities.

Following this scoping review, we may uncover specific action points for you thatcan demonstrate tangible savings for yourcompany. We can work from your current expenditure levels to produce benchmarkprices to verify the results.

Our initial analysis will look at:

• Group turnover/profitability• Operating costs• Floor space• Headcount• Acquisition criteria• Lease terms/book value• Market values• Void space – whole buildings

or within buildings

Strategic PropertyCosts Review

4 Strategic Property Costs Review

Rationalise Annual Property Costs

Strategic Property Costs Review 5

This data could then be used to compare performance across the portfolio to identify:

• Performance measures including cost/employee/turnover per square foot

• Effectiveness of site acquisition and disposal strategy

• Exposure by site/store/portfolio• Trouble spots• Relocation/closure options – after liaising

with local managers• Accuracy of provisions• Effectiveness of disposal programme –

restructuring• Individual site/store analysis• Head office costs

We will then have specific benchmarkswhich can be used to compare sites withina single company and also overall costscompared to industry standards. Thesecosts would then guide many future decision making strategies and could be backed up by further qualitative property analysis, when needed.

6 Business Rates

Business Rates

The business rates that a company payscan be reduced through an appeals processand savings are possible over a five-yearperiod. The average reduction in rating assessments by our specialist team is 14%.

The current rating revaluation is effectivefrom April 2005 and definite opportunitiesexist to reduce business rates up to 2010 andbeyond, when a further revaluation takesplace. The revaluation reflects movements inthe property market and the rates bill you receive from your Local Authority may havebeen rising above inflation to take accountof these changes. However, a proposal can belodged against your rateable value and anyreduction could benefit you over the wholefive-year period of the revaluation.

What process would we follow?

In order to focus on those appeals that create a stronger opportunity for savings,we initially correspond with our clients to gather key information about their property and any proposed changes.

An inspection is usually then undertaken followed by recommendations on whetherto appeal. The matter will result in negotiations with the Valuation Office,hopefully achieving savings. Following any settlement, we will liaise with the Local Authority to ensure the saving is refunded correctly to you.

Save £££’s by dramatically reducing your business rates.All fees are charged on a ‘no saving, no fee’ basis, so if there is no rates saving, there would be no charge.

Business Rates 7

Additional savings opportunities exist wherephysical changes exist in the locality thathave a negative impact on a rateable value.Clients may be able to secure a temporary reduction in the rateable value up to 20%!

There may also be further opportunities to reduce rates liabilities for empty

accommodation that previously may have had reduced or zero rates but nowhave a full charge. Each property would be considered differently and pro-activelybut there is still excellent scope for savings here.

Tower chart

Reach for the low hanging fruit!

8 Rent Reviews & Lease Renewals

Rent Reviews & Lease Renewals

Are you paying over the oddsfor your rent?

When a landlord quotes a revised figure atrent review or for a new lease, the quotedrent can be challenged, based on a detailedunderstanding of the lease, together withmarket evidence.

An adviser should be involved at an earlystage to provide the correct advice, includingchecks for any ‘time of the essence’ clauses.

In undertaking a rent review, it is extremelyimportant to initially value the covenantscontained in the lease and relate those tocomparable evidence.

Our service comprises:

• Undertaking a detailed inspection of the premises, together with a full and thorough reading of the lease provisions

• Analysis of the rental evidence and details of any rent-free incentives provided

• Meeting the other appointed Surveyor to compare lease findings, details of the property and comparable evidence

• Negotiations• Recommendation reports to the Client

regarding the level of rent that is applicable having compared the evidence put forward by both parties, leading eventually to an agreed rent, failing that, reference to independent Third Party mediation.

We welcome the opportunity to discuss yourrequirements in more detail and look forwardto arranging a meeting to showcase our service, expertise and our commitment to meeting your needs.

Rent Reviews & Lease Renewals 9

Interested? What you should do next?

We will require a copy of the lease and anyrent review memoranda if appropriate. Having discussed the situation, we will create a brief audit report of our advice. We will then provide initial advice on ouropinion of rental value.

You can rest assured that we offer expertise,up-to-date market knowledge and a genuineenthusiasm for communicating with ourclients.

Should your lease be due to end, there arealso opportunities to renegotiate the termsand possibly a rent reduction along with anyother more favourable terms that are re-quired.

10 Dilapidations

Dilapidations

Lease coming to an end?Unsure of your responsibilities?

Typically, a tenant is responsible for the upkeep of their property during the periodof their occupation. Upon expiry of a lease,the landlord can instruct a surveyor to establish whether there are any breaches of these responsibilities and demand payment for losses incurred.

It is possible through an understanding ofthe client’s lease, the property and propertylaw to query the amount of the claim. Thiscan enable us to set about reducing thisclaim and ultimately saving money for the occupier.

A Landlord’s claim will provide a full breakdown of the alleged breaches, the required repair works, the cost of these repairs and associated fees. On some occasions, there may also be an element for loss of rent, as the landlord will allegethat the condition of the property hasharmed its re-letting capability.

Our service includes:

• Understanding how to interpret the repair clauses in your lease

• Determine whether the repairs are required under the terms of your lease

• Consider the impact of any tenants improvements

• Calculating the cost of repairing the breaches

• Evaluate what impact the current condition of the property has on its re-letting capability

• Respond to the landlord or the surveyor on your behalf

• Negotiate potential savings with the landlord or the surveyor

Dilapidations 11

Success Story

National ClientLocation: Weston Super MareLandlord’s surveyors prepared a Scheduleof Dilapidation and Wants of Repair and Redecoration amounting to a total claim of £56,500.

We initiated our involvement with a thorough review of the lease and alsoarranged a joint site inspection with the opposing surveyor.

We were able to identify parts of the claimthat our client was not liable for, as theywere outside of their leased area. It wasalso apparent that parts of the propertywere in poor condition and it would be tantamount to an improvement to incurthis expense.

We were able to review all the allegedbreaches and review if the required repairsand redecoration were reasonable. In manycases we were able to establish elementsthat were unreasonable.

As property specialists, we undertook a review looking at whether the allegedbreaches would actually damage the potential letting of the client’s former accommodation. If we could argue thespace would let just as readily, it could be possible to effectively dispute most of the claim.

Finally, we evaluated the Landlord’s surveyors fees and considered if these weredeemed to be excessive. We successfullynegotiated a reduction in the claim from£56,500 to £28,000, effectively halving the amount.

Acquisitions

12 Acquisitions

How shrewd are your property negotiations?

Acting nationally on many property acquisitions, we tap into the latest dealsmeaning that we are perfectly positioned to offer advice on rent and pricing whilstnegotiating the best deal for the client.

We ensure that the proposed terms are fairand protect the client’s interests now and in the future.

Expense Reduction AnalystsProperty?

We have an extensive knowledge of theagency market, courtesy of our corporateproperty role to a national client base.

Furthermore, the knowledge we acquireabout our client’s business, together withour knowledge of the property market, provides us with the best opportunity to identify properties that suit your requirements.

We don’t waste your time offering numerous properties that simply do not match your needs.

10-Stage Acquisition Process 13

2 Summarise all Available Properties

3 Create a Short-Listof Properties to View

4 Conduct Inspections

5 Short to Long-Term Impact

9 Consider Related Property Services

8 Further Inspectionof Property

7 Agree Heads of Terms

6 Negotiations on Selected Options

1 Confirm the Acquisition Criteria

10 Exchange and Complete

Expense Reduction Analysts’ 10 Stages to SuccessfulProperty Acquisition

10-Stage AcquisitionProcess

14 10-Stage Acquisition Process

10-Stage AcquisitionProcess

1 Confirm the Acquisition criteria. Structuring a brief to identify exactly what you require, including location, size, configuration, quality, car parking, accessibility and cost parameters.

2 Creating a full and thorough list of all possibilities that meet the above brief, including collation of brochures and plans of all options.

3 Discussing the list of possibilities with yourselves, providing direct comments where suitable, with a view to creating a shortlist of best options. Once this has been achieved, then the process of acquisition can proceed.

4 Undertaking, either with you or independently, a thorough inspection of the options, creating a precise comment on suitability.

5 After inspecting your selected list of properties, we will comment not only on the short-term, but also observe the impact over the long-term such as planning issues, future development opportunities and the impact of lease obligations.

6 Agree the acquisition of a selected option, whilst at the same time ensuring that the other suitable options are kept live in reserve, so as not to give the preferred option any advantage.

10-Stage Acquisition Process 15

7 Agree detailed Heads of Terms for an acquisition (or renewal) including demise, lease length/tenure, rental/price, repairing covenants, service charge levels, legal costs and any incentives available.

8 Once Heads of Terms are agreed, to undertake a final inspection of the property and to verify floor areas etc.

9 At this stage to offer, if required, other services such as Rating, Building Surveying, schedule of Conditions etc.

10 Proceed to an acquisition of the selected options alongside your legal advisors to ensure that any legal agreement properly reflects the negotiated terms.

Our involvement will always keep your interests as the foremost requirement, andhopefully will keep your time commitmentto a minimum. The importance therefore instructuring an accurate brief that we can allwork to cannot be stressed enough and ourwork will be undertaken swiftly and withminimum fuss for you.

Our fees are typically charged on a percentage of the acquisition price or rental amount, with no fee payable if a suitable property is not identified.

16 Corporate Property Advice

Corporate Property AdviceEncompasses all Property Services

Profit through property

Our aim is to reduce the medium term solution that is inevitably associated withcommercial property, to a managed processthat allows property to perform as an asset.

Strategic property decisions need to be atthe forefront of your business to improve your company performance.

In line with this, it is ideal to then create acorporate property strategy to coordinatethe separate elements that are involved inthe property process. We know that property decisions are generally a reactive response to a particular request or event and they may not be part of an organised plan.

What is involved?

Through an experienced and focused approach, we will initially gather an appreciation of your company, your currentproperty portfolio and costs relative to yourcompany turnover.

We believe that it is important for us to understand if your company occupies largeproperties on long leaseholds or if you require short-term leases based on a localised work contract. Alternatively, you may prefer to trial new locations firstand require lease flexibility, or your business may demand a substantial amountof alterations to a property before you cancommence trading.

Following our initial appreciation of yourlong-term business and property goals, we will create a strategy based on yourneeds, providing specific advice using our expertise and understanding.

Services 17

The Strategy

• Read and understand all tenure• Create a terrier of data• Devise an acquisition/disposal list• Budget for rent reviews• Create a database of inspections

and properties• Record for lease renewals, critical

break dates, repairing frequencies, etc.

The Actions

• Assess and budget for dilapidations• Help local branches deal with

Landlords/Tenants• Carry out rent reviews/lease renewals• Carry out acquisitions/disposals• Advise and challenge business rating

assessments• Planning advice for own use and/or

higher value uses• Appraisals and valuations• Bring forward pro-active

recommendations• Act as an equivalent in-house

property team

Benefits

• Achieve Client objectives• Create a better property understanding

and control of Clients property• Meet with Client on regular basis• Appoint and manage local advisers• Charge market fees for work types• Enjoy a full and rewarding client/advisor

relationship that benefits all parties• Save Client money/budget for costs

How is this different to conventional advice?

All too often companies acquire and dispose of property in an ad-hoc fashion,which places unnecessary time pressureson the personnel involved and is also likelyto cost your company money, either todayor in a few years time or at the expirationof a lease. Corporate advice applies aplanned strategy to your decision making,ensuring fewer surprises and hence savingyou money.

18 Services

How will it benefit you?

Your company will notice improved performance, as you will have the correctproperty structure in place to support youroperations.

In addition, you will experience cost savings as this planned and preventativeaction avoids surplus space, reduces dilapidations costs and avoids excessive occupancy costs of rent, business rates and service charges,

How are fees charged?

These can be charged on a fee basis thatbest suits your company. There would normally be a base charge and then a percentage fee is usually charged, for example on the acquisition costs or based on cost savings.

Expense Reduction Analysts services areundertaken by consultants whose firms are members of the Royal Institution ofChartered Surveyors (RICS). RICS is one of the most respected organisations forproperty professionals. As members they are highly experienced, chartered professionals offering impartial, specialist advice.

The Expense Reduction Analysts Property Team can

achieve, on average, savings of 30% for its clients.

To find out how you can benefit from this service

contact your local specialist.

Expense Reduction

Analysts

www.erauk.net

Argentina Australia Austria Belgium Brazil Canada Chile Columbia Ecuador France

Germany Greece Hungary Jordan Italy Lebanon Luxembourg Mexico Morocco Netherlands

New Zealand Panama Portugal Spain Taiwan United Kingdom & Ireland United States Uruguay

find extra profit