UK commercial property lease structures: Landlord and tenant mismatch

UK commercial property lease structures have come under considerable scrutiny during the past decade since the property crash of the early 1990s. In particular, tenants complained that the system was unfair and that it has blocked business change. Government is committed, through its 2001 election manifesto, to promote flexibility and choice in the commercial property lettings market and a new voluntary Commercial Leases Code of Practice was launched in April 2002. This paper investigates whether occupiers are being offered the leases they require or whether there is a mismatch between occupier requirements and actual leases in the market. It draws together the substantial data now available on the actual terms of leases in the UK and surveys of corporate occupiers' attitude to their occupation requirements. Although the data indicated that UK leases have become shorter and more diverse since 1990, this is still not sufficient to meet the current requirements of many corporate occupiers. It is clear that the inability to manage entry and exit strategies is a major concern to occupiers. Lease length is the primary concern of tenants and a number of respondents comment on the mismatch between lease length in the UK and business planning horizons. The right to break and other problems with alienation clauses also pose serious difficulties for occupiers, thus reinforcing the mismatch. Other issues include repairing and insuring clauses and the type of review clause. There are differences in opinion between types of occupier. In particular, international corporate occupiers are significantly more concerned about the length of lease and the incidence of break clauses than national occupiers and private-sector tenants are significantly more concerned about leasing in general than public-sector occupiers. Proposed solutions by tenants are predictable and include shorter leases, more frequent breaks and relaxation of restrictions concerning alienation and other clauses. A significant number specify that they would pay more for shorter leases and other improved terms. Short leases would make many of the other terms more acceptable and this is why they are the main concern of corporate occupiers. Overall, the evidence suggests that there continues to be a gap between occupiers' lease requirements and those currently offered by the market. There are underlying structural factors that act as an inertial force on landlords and inhibit the changes which occupiers appear to want. Nevertheless, the findings raise future research questions concerning whether UK lease structures are a constraining factor on UK competitiveness.

Lease maturity and initial rent: is there a term structure for UK commercial property leases?

This paper investigates the relationship between lease maturity and rent in commercial property. Over the last decade market-led changes to lease structures, the threat of government intervention and the associated emergence of the Codes of Practice for commercial leases have stimulated growing interest in pricing of commercial property leases. Seminal work by Grenadier (1995) derived a set of hypotheses about the pricing of different lease lengths in different market conditions. Whilst there is a compelling theoretical case for and a strong intuitive expectation of differential pricing of different lease maturities, to date the empirical evidence is inconclusive. Two Swedish studies have found mixed results (Gunnelin and Soderbergh 2003 and Englund et al 2003). In only half the cases is the null hypothesis that lease length has no effect rejected. In the UK, Crosby et al (2003) report counterintuitive results. In some markets, they find that short lease terms are associated with low rents, whilst in others they are associated with high rents. Drawing upon a substantial database of commercial lettings in central London (West End and City of London) over the last decade, we investigate the relationship between rent and lease maturity. In particular, we test whether a building quality variable omitted in previous studies provides empirical results that are more consistent with the theoretical and intuitive a priori expectations. It is found that initial leases rates are upward sloping with the lease term and that this relationship is constant over time.

Ex ante evaluations of alternate data structures for end user queries: Theory and experimental test

The data structure of an information system can significantly impact the ability of end users to efficiently and effectively retrieve the information they need. This research develops a methodology for evaluating, ex ante, the relative desirability of alternative data structures for end user queries. This research theorizes that the data structure that yields the lowest weighted average complexity for a representative sample of information requests is the most desirable data structure for end user queries. The theory was tested in an experiment that compared queries from two different relational database schemas. As theorized, end users querying the data structure associated with the less complex queries performed better Complexity was measured using three different Halstead metrics. Each of the three metrics provided excellent predictions of end user performance. This research supplies strong evidence that organizations can use complexity metrics to evaluate, ex ante, the desirability of alternate data structures. Organizations can use these evaluations to enhance the efficient and effective retrieval of information by creating data structures that minimize end user query complexity.

Do RNA viruses require genome cyclisation for replication?

Complementary sequences at the 5′ and 3′ ends of the dengue virus RNA genome are essential for viral replication, and are believed to cyclise the genome through long-range base pairing in cis. Although consistent with evidence in the literature, this view neglects possible biologically active multimeric forms that are equally consistent with the data. Here, we propose alternative multimeric structures, and suggest that multigenome noncovalent concatemers are more likely to exist under cellular conditions than single cyclised monomers. Concatemers provide a plausible mechanism for the dengue virus to overcome the single-stranded (+)-sense RNA virus dilemma, and can potentially assist genome transport from the virus-induced vesicles into the cytosol.

Student satisfaction with models of field placement supervision

Field placements provide social work students with the opportunity to integrate their classroom learning with the knowledge and skills used in various human service programs. The supervision structure that has most commonly been used is the intensive one-to-one, clinical teaching model. However, this model is being challenged by significant changes in educational and industry sectors, which have led to an increased use of alternative fieldwork structures and supervision arrangements, including task supervision, group supervision, external supervision, and shared supervisory arrangements. This study focuses on identifying models of supervision and student satisfaction with their learning experiences and the supervision received on placement. The study analysed responses to a questionnaire administered to 263 undergraduate social work students enrolled in three different campuses in Australia after they had completed their first or final field placement. The study identified that just over half of the placements used the traditional one student to one social work supervisor model. A number of “emerging” models were also identified, where two or more social workers were involved in the professional supervision of the student. High levels of dissatisfaction were reported by those students who received external social work supervision. Results suggest that students are more satisfied across all aspects of the placement where there is a strong on-site social work presence.

Student satisfaction with models of field placement supervision

Field placements provide social work students with the opportunity to integrate their classroom learning with the knowledge and skills used in various human service programs. The supervision structure that has most commonly been used is the intensive one-to-one, clinical teaching model. However, this model is being challenged by significant changes in educational and industry sectors, which have led to an increased use of alternative fieldwork structures and supervision arrangements, including task supervision, group supervision, external supervision, and shared supervisory arrangements. This study focuses on identifying models of supervision and student satisfaction with their learning experiences and the supervision received on placement. The study analysed responses to a questionnaire administered to 263 undergraduate social work students enrolled in three different campuses in Australia after they had completed their first or final field placement. The study identified that just over half of the placements used the traditional one student to one social work supervisor model. A number of “emerging” models were also identified, where two or more social workers were involved in the professional supervision of the student. High levels of dissatisfaction were reported by those students who received external social work supervision. Results suggest that students are more satisfied across all aspects of the placement where there is a strong on-site social work presence.

Tailoring of Structural Morphology of Silver Nanowires in Electrochemical Growth

Noble metal such as Ag normally exists in an fcc crystal structure. However as the size of the material is decreased to nanometer lengthscales, a structural transformation from that of its bulk state can be expected with new atomic arrangements due to competition between internal packing and minimization of surface energy. In many previous studies, it has been shown that silver nanowires (AGNWs) grown inside anodic alumina (AAO) templates by ac or dc electrochemical deposition from silver salts or complexes, adopt fcc structure and below some critical diameter ∼ 20 nm they may acquire hcp structure at low temperature. This is, however, critically dependant on the nature of confinement, as AgNWs grown inside nanotube confinement with subnanometer diameter have been reported to have fcc structure. Hence the question of the crystal structure of metal nanowires under combined influence of confinement, temperature and deposition condition remains open. In this abstract we show that the alternative crystal structures of AGNWs at room temperature can be achieved with electrochemical growth processes under specific conditions determined by the deposition parameters and nature of confinement. We fabricated AgNWs of 4H hexagonal structure with diameters 30 – 80 nm inside polycarbonate (PC) templates with a modified dc electrodeposition technique, where the nanowires were grown at deposition potentials as low as 10 mV in 2 M silver nitrate solution[1]. We call this low-potential electrodeposition (LPED) since the electrodeposition process occurs at potential much less than the standard Nernst potential (770 mV) of silver. Two types of electrodes were used – stainless steel and sputtered thin Pt film, neither of which had any influence on the crystal structure of the nanowires. EDS elemental analysis showed the nanowires to consist only of silver. Although the precise atomic dynamics during the LPED process is unclear at present, we investigated this with HRTEM (high-resolution transmission electron microscopy) characterization of nanowires grown over various deposition times, as well as electrical conductivity measurements. These experiments indicate that nanowire growth does not occur through a three-dimensional diffusion controlled process, as proposed for conventional over-potential deposition, but follow a novel instantaneous linear growth mechanism. Further experiments showed that, (a) conventional electrochemical growth at a small over-potential in a 2 mM AgNO3 solution yields nanowires with expected fcc structure inside the same PC templates, and (2) no nanowire was observed under the LPED conditions inside hard AAO templates, indicating that LPED-growth process, and hcp structure of the corresponding nanowires depend on deposition parameters, as well as nature of confinement.

Environmental evaluation of localising production as a strategy for sustainable development: a case study of two consumer goods in Jamaica

The objective of this study was to compare the life-cycle environmental impacts of changed production structures for two consumer goods (high-density polyethylene (HDPE) shopping bags and beds) in Jamaica. A scenario technique was used to construct three alternative production structures for each product; each scenario reflecting an increase in local production in Jamaica which depended on an increased supply of input materials which may be sourced: (1) externally from overseas suppliers, (2) from post-consumer recycling, and (3) locally on the island of Jamaica. These three constructed scenarios were then compared to the existing supply chain or reference scenarios of the products. The results showed that for both case products the recycling scenario was most preferable for localising production, resulting in the lowest environmental impact. This was because the production of raw materials accounted for the largest effect on total environmental impact. As such, the most immediate environmental improvements were realised by lowering the production of virgin materials. © 2007 Elsevier Ltd. All rights reserved.

Lesbian migrants in the gentrified valley: other 'geographies' of rural gentrification

This paper explores the migration and cultural consumption practices of lesbian households within processes of rural change. Taking forward Phillips' (2004. Progress in Human Geography 28, 5-30) discussion of neglected geographies of rural gentrification, and building upon Halfacree's (2001. International Journal of Population Geography 7, 395-411) critique of dominant conceptualisations of rural in-migrants, the paper presents empirical findings from a qualitative study of lesbian households in Hebden Bridge, West Yorkshire. This follows up an earlier study of rural gentrification (Smith and Phillips, 2001. Journal of Rural Studies 19, 457-469). Lesbian households are shown to be a significant group that socially and culturally (re)produce distinct constructions of rurality, and act as gentrifiers via their migration, residential, and consumption practices. Many parallels to the migration processes of non-lesbian gentrifiers in Hebden Bridge are revealed, with the alternative cultural structures of Hebden Bridge being a key factor. We therefore argue that lesbian households should not be 'othered' within discourses of rural gentrification. The discussion emphasises the value of focussing upon neglected socio-cultural groups in robust ways, in order to shed light on the wider lifestyles and experiences of diverse rural populations, and to deepen understandings of other geographies of rural gentrification. (c) 2005 Elsevier Ltd. All rights reserved.

Are property agents to blame for upward only rent reviews?

In negotiating commercial leases, many landlords and tenants employ property agents (brokers) to act on their behalf; typically these people are chartered surveyors. The aim of this paper is to explore the role that these brokers play in the shaping of commercial leases in the context of the current debate in the UK on upward only rent reviews. This role can be described using agency theory and the theories of professionalism. These provide expectations of behaviour which show inherent tensions between the role of agent and professional, particularly regarding the use of knowledge, autonomy and the obligation to the public interest. The parties to eleven recent lease transactions were interviewed to see if the brokers conformed to the expectations of agency theory or professionalism. Brokers that acted for industrial and office tenants behaved as professionals in using their expertise to determine lease structures. However, those acting for landlords and retail tenants simply followed instructions and behaved as conduits for their clients, a role more usually associated with that of an agent within the principal-agent relationship. None of the landlords’ brokers saw themselves as having responsibilities beyond their clients and so they were not promoting the discussion of alternatives to the UORR. The evidence from these case studies suggests that agents are not professionals; to behave entirely as an agent is to contradict the essential characteristics of a professional. While brokers cannot be held entirely responsible for the lack of movement on the UORR, by adopting predominantly agent roles then they must take some of the blame. However, behind this may be a much larger issue that needs to be explored; the institutional pressures that lead to professionals behaving in this way.

Retention rates, re-investment and depreciation in European office markets

The retention rate of a company has an impact on its earnings and dividend growth. Lease structures and performance measurement practice force real estate investment managers to adopt full distribution policies. Does this lead to lower income growth in real estate? This paper examines several European office markets across which the effective retention rates vary. It then compares depreciation rates across these markets. It is concluded that there is evidence of a relationship between retention and depreciation. Those markets with particularly inflexible lease structures exhibit low retention rates and higher levels of rental value depreciation. This poses interesting questions concerning the appropriate way to measure property performance across markets exhibiting significantly different retention rates and also raises important issues for global investors.

Occupational futures? Divesting real estate and corporate PFI

Property ownership can tie up large amounts of capital and management energy that business could employ more productively elsewhere. Competitive pressures, accounting changes and increasingly sophisticated occupier requirements are building demand for new and innovative ways to satisfy corporate occupation needs. The investment climate is also changing. Falling interest rates and falling inflation can be expected to undermine returns from the traditional FRI lease. In future, investment returns will be more dependent on active and innovative management geared to the needs of occupiers on whom income depends. Occupier and investor interests, therefore, look set to coincide, but unlocking the potential for both parties will depend on developing new finance and investment vehicles that align their respective needs. In the UK, examples include PFI in the public sector and off-balance sheet financing in the private sector. In the USA, “synthetic lease” structures have also become popular. Growing investment market experience in assessing risks and returns suggests scope for further innovative arrangements in the corporate sector. But how can such arrangements be structured? What are the risks, drivers and barriers?