It’s just an opinion, not a fact!

Since COVID, property values have fallen across most sectors of the industry.

One that seems to have bucked the trend is private education and over recent years, there has been a bit of a boom in private pre school nurseries popping up.

These have become the modern day equivalent of the restaurant within the historic shop sector….…fewer properties due to planning restrictions or building characteristics equating to greater demand on the supply chain along with corporate operators pushing up rental values.

So when an educational property faces a rent review, the industry will simply tend to look towards the most recent transactions in the market to determine current value.

Unlike shops or offices though, where clusters of similar properties are located in close proximity, pre school nurseries tend to be located in disparate locations where underlying values are very different.

Pre school nurseries can also occupy very different types of property, from purpose built, modern premises to converted petrol filling stations and so like for like comparisons are not as straightforward.

Ashurst Real Estate recently acted for a long standing client with a rent review of an inner London pre school nursery converted from a Victorian era fire station.

With its physical characteristics very different from other nursery premises and it’s rent review date set within the COVID period, comparable evidence interpretation was not routine.

Valuation is an art, an opinion and inevitably after several months of stalemate an independent expert was appointed to determine the new rent after disagreement over the considerable differences between the subject property and the evidential properties. Differences that included location, physical characteristics, treatment of external areas, service charge contributions and further lease terms.

Given the number of differences and how they affected rental value, it wasn’t surprising that an independent expert was required to determine the new rent.

Having considered both parties’ formally submitted proof’s of evidence and after taking several months to issue his decision, the independent expert made his award in Ashurst Real Estate’s favour.

Rent reviews are often contentious and having to resort to an independent expert’s award or an arbitration to settle the dispute can be costly.

In this instance, it was money well spent as our tenant client is now better off by £67,500 per annum, which is the difference between the original rent review trigger notice and the expert witness’s award.

However, whilst an independent expert’s determination is binding for the dispute to which it refers, it is not binding on future rent review disputes. It still remains an opinion rather than a fact!

Contact Ashurst Real Estate if you require advice on a rent review dispute.

020 7419 5117 | ashurstre.london