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PROPERTY AND PROCUREMENT


ACQUIRING COMMERCIAL PROPERTY IN THE RENEWABLES SECTOR


With the increase in activity in renewable energy and in particular, offshore wind farms, many organisations in the supply chain are looking to increase or develop their commercial property facilities.


Matthews & Goodman LLP have a long established record in this sector so we approached them for some advice.


They provide the full range of property advisory services required by occupiers, developers and investors of property.


Matthews Goodman were established in London in 1865 and cover the UK from their offices in the London, Manchester and Liverpool. They are ISO 9001 accredited and relevant personnel are regulated by the Royal Institution of Chartered Surveyors (RICS) and the Royal Town Planning Institute (RTPI).


This article considers the principal issues in procuring properties and land.


LOCATION


In deciding where to relocate the business you will consider several principal high level factors determined by proximity to market place, availability of labour, transport infrastructure, and pricing, amongst others.


A particular occupier may need to be located in close proximity to a particular customer or as is the case with a number of suppliers in the offshore wind industry, a port facility in a number of coastal locations.


SIZE AND SPECIFICATION


The occupier will quickly be able to establish the size of building required but other considerations need to be considered.


• Building expansion space • External circulation and storage areas • Power supply


With factory facilities critical dimensions such as eaves height need to be established at an early date as this will have a direct bearing on building costs.


TENURE


At an early stage of the property procurement process clarity is needed as to whether the occupier wishes to own the facility freehold or to take a lease. If the occupier does not wish to invest the capital and employ the design and build team direct then early discussions need to be undertaken with a developer or project manager who can fulfil this role.


34 Wind Energy NETWORK


Prior to entering into a legal commitment, a specification can be agreed with the developer and terms negotiated for either a presale (ie the completed facility being sold to the occupier) or the occupier can commit to entering a lease which will be completed once building works have been concluded to an agreed specification. For larger scale buildings it is highly likely that developers will need a lease commitment from an occupier for a minimum of 10 years in order to secure funding for the project.


Critical to the decision making process over whether the occupier wishes to lease or own the property is their balance sheet treatment of the property assets generally and whether they wish to have capital tied up in property facilities or whether they prefer for the capital to be invested in their business.


DUE DILIGENCE


Prior to committing to a site the occupier will wish to undertake due diligence to establish all risks involved and to confirm a likely timescale for the project.


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