Client: St Modwen Properties
Following the acquisition of much of the ex-Marconi estate, our client, St Modwen, instructed our rating team to advise them on their new liabilities. It has successfully disposed or developed much of this diverse portfolio, but a number of office sites had proved awkward because they were not located in traditionally commercial areas.
Their solution was to establish a new venture to develop managed, medium-term offices for use by multiple tenants. Three office buildings in Poole, Dorset were identified as early candidates for the new venture.
This innovative use of commercial buildings in non-commercial places was one of the first schemes of its type in the UK.
The biggest obstacle facing the new business venture was the excessive rates bills threatening to eat into the potential profits.
St Modwen instructed us to help them manage and reduce their rates liabilities whilst ensuring that we kept the solutions simple and didn’t create an unnecessary bureaucratic burden.
The first thing we sought was to get the rateable value basis reduced to an acceptable level. Next, we pursued part-occupation relief with the billing authority to minimise liability during the build-up of occupation. Following this, we arranged for separate assessments for new tenants who were responsible for their own outgoings.
St Modwen’s new venture continues to be vulnerable to unnecessary property costs, so we manage rates liability and occupancy levels very closely. Our client’s venture has proved to be a success and further management centres are being released onto the market.
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