| the north east


NEW LEGISLATION AFFECTS COMMERCIAL LANDLORDS


any new leases of their private rented property, where their property fell below the Minimum Energy Efficiency Standards (MEES). Richard Robinson, a Partner in Shulmans LLP’s Property Litigation Team, provides a brief overview of the MEES regime and some of the issues to keep under review as the new regulations are tested and enforced by local authorities.


O


What you need to know MEES were introduced by the government in March 2015 to meet its obligations under the Energy Act 2011 to improve the efficiency of both domestic and non- domestic buildings. MEES now prevent landlords from


lawfully granting new leases and, from 1st April 2023, continuing to let properties with an EPC rating less than an E (i.e. F or a G).


The penalties for non-compliance can


n 1st April 2018 it became unlawful for commercial landlords to enter into


be severe: BREACH • Renting out a property for less than three months in breach of MEES


• Greater than three months in breach of MEES


PENALTY • 10% of the property’s rateable value, with a minimum penalty of £5,000 and a maximum of £50,000


• 20% of the rateable value with a minimum penalty of £10,000 and a maximum of £150,000


Enforcement is in the hands in the


Local Weights and Measure Authorities. If local authorities are to retain the penalty sums, the property sector may see strict policing of MEES. MEES are, however, subject to a


number of exceptions and exemptions. For example, a property without an EPC is not subject to the regulations and if works to bring a property up to the minimum


GEM IMPORTS TO BARNSLEY N


ew wholesale company launched by Poundworld Retail Ltd’s ex co-founder and trading director joins Capitol Park, Barnsley. Gem Imports has recently completed its move to a new 75,000 ft² logistics facility at Capitol Park, next to junction 37 of the M1 in Barnsley.


Gem Imports is a new wholesale company that specialises in Far East sourcing, supplying over 1,000 products to UK and EU markets via its website and purpose-built showroom. The company is run by co-founder and ex-trading director at Poundworld Retail Ltd, Christopher Edwards Junior and will sell to a wide range of customers including national retailers, online retailers, eBay and Amazon sellers, market traders, independent shops, cash and carry and commercial sectors. Edwards is passionate about trading and has worked in the imports field for over 17 years’ since he co- founded one of the UK’s biggest retail chains, Poundworld Retail Ltd, after leaving school at the age of 16. The new facility, built to a high specification by Marshall Construction, has a purpose-built showroom, design studio and sourcing office. Gem Imports is utilising this to showcase its diverse range of everyday and seasonal products and provide a full in-store experience for potential suppliers. Now operational, the company has recruited 20 staff and expects to grow rapidly providing a first- class service to its customers. The company has been supported by Barnsley Council’s Enterprising Barnsley investment team, who have provided help and advice alongside specialist business coaching. Martin Beasley, Enterprising Barnsley Group Leader, said:


“We're delighted to welcome Gem Imports to Barnsley and look forward to supporting its future growth. The company’s decision to move to the borough is great news, and we welcome the new opportunities this will bring to our local jobs market and Barnsley’s economy.”


70 H


standard would not be cost-effective over a defined period of time then an exemption may apply. However, landlords should take


professional advice if they are uncertain as to whether an exemption may apply. A failure to meet and evidence the exemption criteria properly may result in significant penalties being incurred. It should be kept in mind that many


older EPCs (which last for ten years) may not now accurately reflect the energy efficiency of a building and that the government may raise the minimum standard. It should also be noted that the costs of


improvement works are unlikely to be recoverable from a tenant if lease clauses were not specifically drafted with MEES in mind. There are always exceptions, but


specialist legal advice should be taken in relation to lease clauses such as service charge, repair and statutory clauses.


HARTSHEAD SQUARE, SHEFFIELD


artshead Square, a prime city centre mixed-use commercial development in the heart of Sheffield, has been brought to


the market for £41m by Greenridge Investment Management. The asset, which covers almost 300,000 sq ft, is fully let. The current passing rent from the property is just under £3m


per annum. Offers for in excess of £41m are being sought for Hartshead Square, which would reflect a net initial yield of around 6.36%. Greenridge director, Bik Bhuptani, says: “With NCP recently secured on a long-term lease, The Department of Work and Pensions openly stating that they wish to remain at the property and significant on-going investment and development into Sheffield, this is an asset that still has huge potential for growth. An acquisition at this level, based on indicative debt terms, would produce an attractive cash on cash return in excess of 10% pa.”


Greenridge Investment Management is being advised by the


Leeds office of Knight Frank, whose director, Rebecca Farnsworth, adds: “In a market short of opportunities, Hartshead Square presents an attractive Sharia compliant investment with exceptionally secure income, the majority of which benefits from RPI linked increases. Sheffield is an exciting and evolving city to invest in.


“Sheffield is experiencing unprecedented change with £1.3


billion to be invested in the region. With major global companies such as McLaren and Boeing announcing new purpose built facilities in the region, Sheffield is being firmly placed on the radar of international investors. “The immediate vicinity of Hartshead Square is being upgraded with a number of redevelopments including residential, student residential, hotel and the creation of a tech hub, increasing the vibrancy and diversity of the area,” she said.


COMMERCIAL PROPERTY MONTHLY 2018


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