Client: Co-operative Group - Frodsham
The Co-operative Group Limited occupies a 29,000 sq ft supermarket in the town centre of Frodsham, Cheshire, holding a prominent position on the main high street. The supermarket was for some time the dominant store in the locality, until Tesco opened in the nearby town of Helsby.
At the latest rent review, the landlord served notice, seeking an increase of approximately £140,000 per annum, which would have resulted in a total increase in rent payable to the next review in five years of £700,000.
Approach
GE lease consultancy experts were appointed by the Co-op to negotiate the rent review on their behalf. GE carried out detailed research into rental evidence on other supermarket premises located throughout the north west and north east of England. GE reported to Co-op and provided a budget rent at which we could recommend a settlement.
The landlord served a notice to trigger the review in which they were seeking a substantial uplift in the passing rent, based on rents agreed on new purpose built supermarkets, which were located in better catchment areas. In addition, many of the comparables were trading from monopolistic positions, unlike the Co-op, which was now subject to competition from the new Tesco store.
Results
As our proposals were rejected by the landlord’s agent, the review proceeded to third party and was determined by an Arbitrator.
The Arbitrator accepted many of our arguments and determined a rent significantly lower than that sought by the landlord. This translated into a saving of approximately £350,000 over five years for the Co-operative Group.
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