COMMERCIAL
Westfield:
beware bolshy
shopkeepers!
sub-letting and mitigating their before and after drawings to assist in the always tend to adapt to change in
exposure. Obviously they are not able to reinstatement and also, if applicable, this circumstances as the property market has
do that if the sub-letting provisions are should assist in rent review negotiations. always been very dynamic. What landlords
particularly tight. From the landlord’s really need to do on an acquisition is to
perspective if the balancing act is done
•
Rent review: the lease needs to include look beyond the current leasing structure
correctly the tenant is encouraged to clear hypothetical lease assumptions and and focus more realistically on the
make better us of the space and is disregards within the review clause and re-letting prospect of the building once the
therefore more likely to stay and renew. reflect the reality of the lease and the current lease expires. In essence, does a
nature and peculiarities of the building. landlord want an occupied building, albeit
•
Alterations: the landlord should be on slightly less favourable terms than they
prepared to take a more relaxed view on After Westfield, will landlords be more would like, or an empty building for which
alterations including structural and willing to take a flexible approach on they are going to be responsible? It may be
external alterations depending on the service charge items and the other that tenants ask for shorter lease terms and
configuration and nature of the building. substantive terms of the leases they grant? these are the norm but given the current
It is obviously not unreasonable to insist Potentially yes, especially in a recession. trend for consolidation both landlords and
on landlord’s consent for any structural Institutional landlords will have to get tenants may show more loyalty to the
alterations. An institutional landlord used to the prospect of shorter lease terms, buildings they are in, which means we may
should not have any problem in any realistic and accountable service charge find situations like Westfield recurring.
alteration so long as the obligation to provisions and the fact they will not be able
reinstate at the end of the term exists and to pass on all costs to prospective tenants. Written by Matthew Williamson, associate in
it is clear and specifically set out exactly In the past the value of an investment was Weightmans’ commercial property team.
what the alterations comprise so there is primarily governed by the strength of the
matthew.williamson@Weightmans.com
no argument over what the tenant covenant that exists under the lease. This
should reinstate at the end of the term. has resulted in the over pricing of poor or
Do you have any comments to share?
Any licence to alter should include both physically obsolete stock. The market will
www.propertydrum.com/articles/westfield
PROPERTYdrum JULY-AUGUST 2009 73
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