SURVEYORS JOURNALVOLUME 8 - THE FUTURE OF RETAIL - SOCIETY OF CHARTERED SURVEYORS IRELAND
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SurveyorS
Journal
v o lu m e 8
i S S u e 3
a u T u m n
2 0 1 8
alSo in ThiS iSSue
Changing ConveyanCing
The fuTure
looking aT limeriCk of reTail
Building SuSTainaBiliTy
newS
preSidenT’S meSSage ConTenTS
n President's message 4
n Editorial 5
n Business news 6
n Regulating rent 12
feaTure ediTorial
n The break-up 16
n Building sustainability 18
n Looking at Limerick 20
n Struggling to conveyance 22
n The future of retail 24
inTerview
n Proptech in Paris 26
n Society news 28
The laST word n Surveyor profile 33
n The last word 34
ConferenCe Surveyor profile
Society of Chartered Surveyors Ireland, EDITORIAL BOARD PUBLISHERS
38 Merrion Square, Dublin 2. Tom Dunne Chairman DIT Published on behalf of the Society
John Costello Costello Commercial of Chartered Surveyors Ireland
Tel: 01-644 5500 Tom Cullen Think Media by Think Media
Email: info@scsi.ie Brian Gilson Lisney
Web: www.scsi.ie Ann-Marie Hardiman Think Media Editorial: Ann-Marie Hardiman
Frank Harrington Smith Harrington Paul O’Grady
Áine Myler, Director General Patrick King SCSI Colm Quinn
Paul Mooney Benchmark Property Design: Tony Byrne
Paul O'Grady Think Media Tom Cullen
www.scsi.ie Rowena Quinn Hunters Niamh Short
Views expressed by contributors or correspondents Andrew Ramsey McGovern Surveyors Advertising: Paul O’Grady
are not necessarily those of the Society of Chartered Sarah Sherlock Murphy Surveys
Surveyors Ireland or the publisher and neither the Paddy Shine Dublin City Council LETTERS, COMMENTS AND ARTICLES WELCOME
Society of Chartered Surveyors Ireland nor the Claire Solon Friends First All submissions will be considered by
publisher accept any responsibility for them. John Vaudin WK Nowlan Real Estate Advisors the Editorial Board: editor@scsi.ie
SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018 3
Surveying CourSeS
more popular
IT’S ENCOuRAGING TO SEE THAT PROPERTy- AND CONSTRuCTION-RELATED
COuRSES ARE BECOMING INCREASINGLy POPuLAR FOLLOWING
THE RECENT ROuND OF CAO OFFERS.
T here is no doubt that activity in the sector has increased, with regional Ireland showing signs of
improvement. With this improvement in business sentiment and activity, other challenges can follow.
Longer hours at work and tighter deadlines often leave us feeling overwhelmed. However, downtime,
and exercise, are not only key to your mental health, they are also incredibly important for the health of any business
or organisation. I hope all members had the opportunity to take time out over the summer to relax, spend time with
family and friends, and to reflect and prepare for the year ahead.
Policy for positive change
As we move closer to Budget day on October 9, we are increasingly conscious of our economy’s fragility to external
shocks and therefore the SCSI is calling on the Government to take a measured approach to the estimated €800m
of fiscal space available to Minister Donohoe. Our pre-Budget submission (see page 28) has called for the
establishment of a ‘Construction Innovation Centre’ to drive down costs and help increase productivity. The volatility
within the sector in recent years fails to support long-term investment and innovation, while the construction industry
is hampered by low productivity. The SCSI Tender Price Index shows that prices will rise by c.7% this year, while the
cost of delivering a standard three-bed semi-detached home in Dublin is approximately €330K and likely to increase.
We need to see substantial increase in the funding of new social homes, while also promoting innovative design and
greater density, with better use of existing land, infrastructure and transport in urban areas. It needs to happen fast.
Our organisation
The SCSI offices are currently undergoing important renovation works, which will create some temporary disruption
for our committees and working groups over the next few months. This will include service and IT improvements to
ensure a comfortable, safe environment for staff and members. We will also be running several conferences in the
coming months, including the Property and Facilities Management Conference, and our National Conference in
November. We urge members to attend as many of these events as possible; they are an excellent way to fulfil your
CPD requirements and stay ahead of the curve on exciting change in the industry.
Apart from our continued presence in the media and online, the Society will reach a rural audience of up to 300,000
at the Ploughing Championships. This year we join forces with other leaders in property, land and construction such
as the PSRA, Ordnance Survey Ireland, the Property Registration Authority, Valuation Office, IPAV, MII and MyHome.ie.
Look out for us at the National Property and Land Information tent beside the Ploughing Championships HQ.
ACTIVITY INCREASING
preSidenT’S meSSage Sector is seeing signs of improvement.
Des O’Brien
President
4 SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018
new how green iS
your CiTy?
approaCheS
THIS EDITION LOOKS AT NEW APPROACHES TO
SELLING, TO CONVEyANCING, TO RETAIL, AND TO
THE SURVEYORS JOURNAL ITSELF.
f The influence of the new Editorial Board is much in evidence in this edition.
A cross-sectional look at the state of the economy of Limerick is, we hope,
the first in a series examining the fortunes of larger towns and cities.
Naturally, we place emphasis on our sectors of interest – construction, land and property
– but these are generally reliable indicators of economic health anyway. We have also
taken a new, pared-down approach to the presentation of both this article, and ‘The last
word’. And speaking of ‘The last word’, Rowena Quinn and Eunan O’Carroll of Hunters
Estate Agents/Space Property Group make a series of logical points in putting the case
for their new approach to the sales process. They say that, within six months, this new
approach has already reduced the average time to sell a property by 70%.
That becomes a very interesting argument in the light of the struggles with conveyancing
outlined by several of our members, and a solicitor, in Colm Quinn’s article on pages 22-
23. That solicitor, John Hogan of Leman Solicitors, also states that he thinks that sale
agreed status should be scrapped. Philip Guckian of Sherry FitzGerald suggests starting
with new builds as a practical way to roll out a new system. Brian Duffy says that a building
survey should be carried out once the decision to sell is made, while Sarah Sherlock
makes a similar point in relation to maps – that sellers should be instructing land
surveyors at the same time as the agent and the solicitor.
We are grateful to the Director of the Residential Tenancies Board, Rosalind Carroll, for
giving the time to talk to the Journal. The Board has an expanding brief and the rental
sector has been under more scrutiny in recent years than ever before. She makes the
point that while it is perceived as dysfunctional, in fact the Board has 340,000 tenancies
registered and disputes referred to them were only in the 1-2% range last year. The
proposed new sanctions regime, she argues, will suit both landlords and tenants.
Marie Hunt writes in her article on the future of retail (pages 24-25) that retail spaces will
have to become more about experiences and less about transactions. She says that as
consumer shopping patterns continue to evolve, there will be changes in how retail
property is designed, fitted out, leased and valued.
We are most grateful to Marie and to all the contributors to the Surveyors Journal.
ediTorial
Tom Dunne % of public green space (parks and gardens). From top right: Dublin,
Editor London, New york, Paris, Singapore, Sydney, Tokyo and Vancouver.
Sources: www.worldcitiescultureforum.com; www.irishtimes.com
SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018 5
CeleBraTing 10 yearS in BuSineSS GOING FROM STRENGTH TO STRENGTH Back row (from left): Ashley O’Toole; Michael Ferry; Hugh Holt; Claire Devlin; Dévon Swale; Paul Finlay; Maria Clara Cavalini; and, Patrick O’Donnell. Front row (from left): David Murray; Karl O’Donovan; Ken Mulligan; Alan Baldwin; Brenda young; and, Eamonn McMullan. The Building Consultancy is now 10 years in business and is The Building Consultancy states that it prides itself on providing a high continuing to expand. Michael Ferry has joined the company and level of professional expertise with a strong emphasis on technical and will take up a director position. He states: “I am incredibly excited to be managerial skills. According to the company, its services cover the part of the growing team, and I am looking forward with the complete spectrum of project management and technical due diligence. other directors on the board to driving the business forward, and It states that it offers a one stop shop list of services, tailored for each seeking opportunities for further expansion and market share, whilst client’s specific requirements. at the same time maintaining, developing and exceeding clients’ Since its foundation, The Building Consultancy states that it has built up expectations”. a strong position in the commercial property market, with a growing The Building Consultancy states that it is also delighted to announce team of 14 staff offering a full range of building surveying services right the appointment of Paul Finlay and David Murray as associate directors, through to design and project management. The company currently recognising their substantial contribution to the business over the employs seven Chartered Building Surveyors, which is one of the largest past years. In addition to these appointments, surveyor Patrick teams in the Dublin market. O’Donnell and interior architects Maria Clara Cavalini and Dévon Swale Commenting on the expansion, Managing Director Alan Baldwin have joined the company. said: “After 10 years in business I am pleased to say that The Building The Building Consultancy was established in November 2007 as an Consultancy is going from strength to strength. We are now one independent building and project consultancy advising occupiers, of the largest independent building consultancies in Ireland funders, commercial property owners and other advisers. delivering a director-led service focused on long-standing client Directors Alan Baldwin, Hugh Holt, Ken Mulligan and Karl O’Donovan relationships, who appreciate the proactive approach that we take in have previously worked for some of Ireland’s largest property, delivering our wide range of services. 2017 was a record year for the architectural and surveying practices, and collectively have a wealth of business and we are confident that 2018 will exceed that experience across all building types and market sectors in Ireland level of performance as the Irish business continues to grow and and Europe. expand”. 6 SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018
kra fiT-ouT for niSSan
FIT-OUT BY KRA
The new Nissan Ireland corporate headquarters in Dublin.
KRA was engaged to provide design, costing, project management and
contract administration services for the relocation of Nissan Ireland’s
corporate headquarters to its new site at Park West Business Park, Dublin.
KRA’s role included: redesigning internal office layouts to meet the client’s
organisational requirements; designing new multi-user areas, including main
reception, kitchen, canteen, bathroom and shower areas; replacement of
existing lighting with new energy-efficient LED fittings; redesigning reception,
and interior design of finishes throughout; managing the removal and
disposal of the old air-conditioning system and replacement with a new highly
efficient VRV system; managing new power and CAT 6 data distribution,
alongside a new communications room build; and, surveying and advising on
general repair and maintenance-related works. KRA also provided strategic
advice in respect of dilapidations and other matters.
kSn appoinTmenTS
NEW DIRECTORS
Back row (from left): Peter Reilly; Darren Flanagan; and, Sean Durcan. Front row
(from left): Bosco Skelly; Niall Newman (MD); and, Paul Brain.
Due to continued success and expansion, the directors of KSN state that they
are delighted to announce the appointment of five new directors to the board.
The new directors are Peter Reilly (Regional), Darren Flanagan, Sean Durcan,
Bosco Skelly and Paul Brain, all of whom have been with KSN for many years.
KSN states that it is very excited about these new appointments, which the
company believes will strengthen the current board of directors and support
its continued growth and position in the industry. The company would like to
congratulate the new directors on reaching this milestone, and thank them
for their efforts and many years of service to date. KSN wishes them every
success in the next stage of their careers with the company.
8 SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018
malColm holliS welComeS graduaTeS
Independent commercial building consultancy firm Malcolm Hollis states Kyle studied at ulster university and undertook his year-long placement
that it is pleased to welcome Aidan Brankin and Kyle Faloon to its Irish at the Southern Health and Social Care Trust, Northern Ireland. He will
offices in Belfast and Dublin. Aidan and Kyle join the team as part of the start at the company’s Dublin office on October 1.
firm’s graduate recruitment programme. Adrian Poucher, Partner at Malcolm Hollis, remarked: “It is exciting and
Aidan studied at ulster university and, as part of his course, undertook a rewarding to help graduates begin their careers in the property industry.
year-long placement in the building control department of Belfast City Our successful graduate programme has been in place for nearly 20 years
Council. He joined Malcolm Hollis in its Belfast office on September 3. and we pride ourselves on our ability to identify and develop young talent”.
SCoTT murphy appoinTS
JaCk donaldSon
Scott Murphy states that it is delighted to announce the appointment of Jack will assist with servicing the current
a new building surveyor to supplement its existing team. Jack workload/client base, as well as
Donaldson, previously with a uK building surveying firm based in contributing to the ongoing
Belfast, is a new addition to the team and brings the total number of development and expansion
technical staff to nine. of the practice.
SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018 9
rogerSon reddan new
offiCe launCh
Rogerson Reddan & Associates is continuing its expansion with the opening
of a new Kildare office at the Waterways complex, Sallins, to add to existing
Dublin and Limerick offices. The Naas/Sallins area is attracting a significant
level of investment, including M7 widening works, the Sallins bypass, and
multiple new residential, retail, commercial and educational schemes.
The increased level of construction activity in Naas and Sallins is no surprise;
with the ever-increasing pressure on the Dublin market, many house hunters
and large multinationals are looking outside Dublin. The Draft Kildare County
Development Plan has earmarked Naas as an area of significant growth
between now and 2023. The improvement to the rail links from Naas/Sallins
directly into Dublin city centre and Grand Canal Dock has attracted many
commuters to residential schemes in the area.
new look for gvadoB
NEW BRAND
From left: Chris Boyle; Lynn Kelly; Fergal Burke; John Algar; Catherine
Loughnane; and, Siobhan Murphy.
GVA Donal O Buachalla is updating its brand appearance to align with its uK
and international partners, GVA and GVA Worldwide.
GVA Donal O Buachalla states that it is one of Ireland’s leading independent
firms of property advisers and Chartered Surveyors, providing expert advice
to national and international clients on all aspects of their property needs,
through its teams in Dublin and Belfast. The company states that since 1954
it has forged a reputation for excellence and the provision of first-class
service and robust advice, backed by in-depth industry knowledge. According
to the company, GVA is the leading commercial property adviser across the
uK and the principal member of the GVA Worldwide international network of
independently owned real estate companies. The company believes this
partnership enables GVA Donal O Buachalla to deliver a unified range of
services to its national and international clients. Since joining GVA Worldwide
in 1997, GVA Donal O Buachalla has collaborated with its global partners to
provide clients with property services throughout Ireland and around the
world. GVA Donal O Buachalla believes that the new design presents a strong,
contemporary image complementing the core principles of integrity,
professionalism and enduring commitment to its clients.
10 SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018regulaTing
renT
ROSALIND CARROLL, DIRECTOR OF THE RESIDENTIAL TENANCIES
BOARD, SPOKE ABOuT THE RTB’S INCREASING RESPONSIBILITIES,
AND HOW TO BuILD A FuNCTIONAL RENTAL SECTOR IN IRELAND.
T he rental sector in Ireland has
always been the poor relation in
terms of housing. In a culture
where home ownership is prized
above all else, renting has traditionally been
seen as a temporary stopgap on the way to
ownership, and this attitude is taking a long time
to change. Culture or not, however, the numbers
Changes in the rental sector
The RTB’s main functions are registering
landlords and tenancies, collecting data and
providing informed research and updates on
the rental sector, offering a non courts-based
dispute resolution service, and providing
information and education to tenants and
landlords on their rights and responsibilities.
termination are being referred to us because
people have nowhere else to go. Before, people
might not have queried the validity of the notice
– although they’re absolutely entitled to do so
– they might have just moved on”.
She acknowledges that regulation in the sector
can be difficult for both landlords and tenants
to understand, and the RTB has taken a
speak for themselves and the Residential The RTB’s overall remit will expand quite number of steps to try to address this. Last
Tenancies Board (RTB) now lists almost dramatically in the not too distant future (of year, they launched a new website – the one
340,000 registered tenancies, with over 714,000 which more later), but for now dispute stop shop – to try to make it easier to navigate
occupants and 174,000 landlords. resolution remains one of its principal the system, and extensive advertising
Rosalind Carroll took over as Director of the RTB functions, and is a fascinating prism through campaigns have sought to inform the public of
in 2016 after a career spent in the housing sector which to see the issues in the rental sector. their rights and responsibilities, and of the
(see panel), and says the rental sector has to be The most frequent disputes brought to the RTB RTB’s role. A webchat facility is also available,
seen in the overall context of housing, where relate to: rent arrears with overholding (where and the organisation now also has a presence
supply issues remain a major challenge: “We are the tenant has been served notice to leave over on social media. In addition, Rosalind and her
starting to see signs of progress – a lot of rent arrears but has not left the property); colleagues monitor how they interact with
stock being bought or built and then notices of termination (with queries coming tenants and landlords who contact them
sold specifically for rental. That’s a from both landlords and tenants); and, deposit directly, to make the process as efficient and
really healthy sign, but restricted retention. Says Rosalind: “Rent arrears are a helpful as possible. She points out that these
supply is still very much the issue”. problem for the landlord but it’s also a problem efforts are making a difference in practice:
[for tenants] with regard to affordability – more “60% of notices of termination that
people are falling into trouble in the same way came to us [in 2017] were valid,
inTerview it happens in the mortgage market, and it whereas in the previous year
Ann-Marie Hardiman affects both parties dramatically. The limited 69% were invalid, so that shows
Managing Editor, supply of properties means more notices of that education is working”.
Think Media
12 SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018The RTB has also launched a voluntary
landlord accreditation scheme, a course
designed to equip landlords with everything
they need to know, thus helping to prevent
disputes and stop problems before they occur.
It’s about professionalising a sector where 70%
of landlords own only one property, and many
find the regulatory regime complex and
difficult: “We’re really looking forward to
rolling it out to more landlords and are keen for
people to sign up and to contact us if they’re
interested. It’s classroom based initially but we
plan to make it web based in future to
expand access outside Dublin and to
landlords with full-time jobs”.
New powers
The rental sector has attracted unprecedented
attention in recent times, as lack of supply,
growing wages, and a buoyant economy drive
rents up, and numbers of people experiencing
homelessness reach new heights. The
perception is of an entirely dysfunctional sector,
where people live in constant fear of rent
increases and evictions. Rosalind tries to put this There is clearly a need to address this and average rent for somebody who’s already living
into perspective: “We have 340,000 tenancies other issues, and new legislation to in a property. That’s a really important statistic
registered, and if we look at the disputes significantly increase the RTB’s powers, both in because most people in the sector – about
referred to us last year, they make up 1-2% of terms of investigation and sanction, will 200,000 tenancies – are in existing tenancies.
the overall registered numbers of tenants”. hopefully go a long way to achieve this. In order to achieve overall transparency of the
She accepts, however, that they are probably not Currently, the RTB’s remit only covers the rental sector we need to know more about
what’s happening within tenancies”.
“
Investigative powers will widen too: “At present
The renTal SeCTor haS aTTraCTed unpreCedenTed the RTB does not have powers to investigate
aTTenTion in reCenT TimeS, aS laCk of Supply, breaches of rights and responsibilities in the
sector. However [under proposed changes to
growing wageS, and a BuoyanT eConomy drive legislation] people will be able to come to us
with information – anonymously if they wish.
renTS, and numBerS of people experienCing We will also have investigatory powers, so it’s
not necessarily left to the most vulnerable to
homeleSSneSS reaCh new heighTS. [come to us]”.
The proposal to introduce a sanctions regime
seeing the full picture: “We have some registration of new tenancies, but will see the RTB’s role evolve, becoming a more
anecdotal evidence that tenants are afraid approximately two-thirds of tenancies at any proactive regulatory body: “It’s about
to come to us. That doesn’t mean it’s one time are ongoing rather than new, proportionality. It’s a criminal offence not to
happening across the board – I absolutely sometimes for long periods. The new register with the RTB – we will work with
believe that the vast majority of landlords and legislation proposes a move towards a system landlords to help them comply but if they don’t
tenants have a good working relationship – but of annual registration, which will allow it to it goes straight to criminal conviction. We are
there are instances where the law is not gather the data it needs on these ongoing trying to move to having a civil stage in between
being followed, and people do not tenancies: “Our Rent Index covers new rents, – a sanctions regime that would allow us to give
know about or are too scared to and is a reflection of the market at the moment, them a caution and a warning for not
come to us”. but it does not tell you anything about the registering a tenancy and for illegal rent
SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018 13Rosalind Carroll has worked in housing for 18 years and says that it’s
very much a career of choice: “Housing is one of my passions”. She
worked in Dublin City Council and in the Department of the
Environment, Community and Local Government before moving to
the Housing Agency, where she was Head of Regulation of Approved
Housing Bodies before moving to the RTB.
Outside of her busy schedule, she spends her free time catching up
with friends and family, and returning play dates with her six-year
old daughter.
“
The renT index haS alSo Been
hugely imporTanT in TermS of Being
aBle To puT ouT auThoriTaTive,
offiCial daTa on renT levelS ThaT’S
roBuST, and Can Be relied upon.
increases. Where there’s no engagement, or [a it’s a big undertaking, and unlikely to happen “We need to think about the fact that some
landlord has] knowingly committed that any time soon. The priority has to be the current tenants will stay short term, some will be
contravention on a large scale, we can then crisis. longer term. We will need more not-for-profit
pursue these landlords with fines of up to landlords offering more affordable rental
€20,000”. Getting the data accommodation that isn’t social housing. That
She acknowledges that these are potentially big The RTB has an important role in the collection will have a stabilising effect. I think we
changes, but thinks they’re needed: “I think it of data on the sector, and has already absolutely need more institutional investment,
will benefit both landlords and tenants. Many contributed significantly: “Before the RTB we more professional landlords. I would also like
landlords are frustrated with their negative didn’t even know how many tenancies there to see some of our smaller landlords grow”.
media profile and we’ll be able to go after the were. The Rent Index has also been hugely In order to be delivered, such a vision would
small number of bad landlords and show the important in terms of being able to put out need to be complemented by significant policy
good as well”. authoritative, official data on rent levels that’s changes: “As we increase security of tenure we
Legislation is currently going through the robust, and can be relied upon. We want the also have to increase security of income for
Oireachtas, and at time of writing it has not RTB to be the official source, because it is landlords. We need to think about what
been finalised, but Rosalind hopes it will be in directly feeding into policy”. structures will incentivise the types of
place by the end of this year, followed by an Annual registration will enable them to add landlords that we want and that are going to
implementation phase that would see the new considerably to this store of information, and lead to a stable, sustainable sector”.
RTB powers up and running during 2019. there are other projects in the pipeline too, Rosalind is optimistic about the future, if we can
Of course, another way to solve these problems including annual surveys of all stakeholders, change attitudes, and provide the regulatory
is to make the regulatory system a little less and a project to analyse the impact of Rent structure to back it up: “We can make renting
complicated, and that’s something Rosalind Pressure Zones on the sector. good for landlords and tenants. But I also think
and her colleagues are very conscious of. In culturally we need to think about renters
fact the RTB’s Strategic Plan 2018-2022 gives The future of renting in Ireland differently. When we think about
as an aim: “Continue to advocate for a The current issues are, obviously, very communities, do we think about
simplified and streamlined Residential significant, but Rosalind and her colleagues the renters in those
Tenancies Act”. Rosalind acknowledges that also have to think in terms of what the sector communities? It’s not
what’s probably needed is a new Act, but while could be, and work towards that. Diversity is just about landlords, it’s
the Minister has given a commitment to reform, key, both in terms of landlord and tenant type: about us as a society”.
14 SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018The
Break-up
IF A PARTy WANTS TO ExERCISE A BREAK CLAuSE IN A COMMERCIAL
LEASE, IT IS IMPORTANT THAT THEy uNDERSTAND AND
FuLFIL ALL THE CONDITIONS INVOLVED.*
i t is not unusual for fixed-term commercial
leases to contain a break clause, which
entitles one party to bring the lease to an
end prematurely. A break clause offers a
significant benefit to a tenant to surrender a lease
prior to the end of its term, with or without penalty.
Break clauses are always construed very strictly,
and if the break clause is subject to the fulfilment
of certain conditions, the courts will usually
demand that those conditions be strictly complied
with. As a matter of contract, a court cannot
rewrite the terms of a negotiated lease and it is
therefore crucial that consideration is given to
possible future outcomes when drafting a lease.
feaTure feaTure
Grainne Loughnane Thomas O'Malley
Associate, Partner,
McDowell Purcell McDowell Purcell
16 SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018Common mistakes in exercising break clauses include: Typical break clause conditions include:
n missing the deadline for service of a break clause; n service of written notice by a given date, often up to six to nine
n failure to comply with the notice provision of the lease in relation to months before the break date;
the service of the break option notice; n payment of a break premium or break penalty;
n the entity exercising the break clause is not the tenant or the notice n vacant possession;
is served on the wrong landlord; n compliance with the covenants of the lease both at the time that the
n failure to pay the full rent due to the end of the quarter; notice was given and the time when the property is vacated;
n failure to pay all sums due; n return of original lease documentation to the landlord;
n failure to provide vacant possession; and, and,
n relying on non-binding/without prejudice discussions relating to n payment of fees, stamp duty and/or VAT that arise out of the transfer,
conditions precedent to the exercise of the break clause. surrender or termination of the lease.
To ensure that the exercise of a break option is effective, it is imperative that the conditions are correctly
exercised to minimise the risk of a challenge by a landlord.
Application of break conditions The break notice was challenged and one of the When the payment was made, the tenant
To understand the application of break conditions, arguments put forward by the landlord was in requested that the landlord’s agent “confirm this
it is best to consider this in light of court relation to how payments had been made. Some is the correct basis for calculating the liability for
decisions. In one uK case, Avocet Industrial payments had been made by cheque and the short period”. The landlord did not respond. In
Estates Limited v Merol Limited (2011 EWHC 3422), electronic transfer, although there was a a subsequent letter, the landlord’s solicitors wrote
a ten-year lease of a factory contained elaborate reference to standing orders in the lease. The to the tenant demanding payment of the balance
break provisions, with a general stipulation that landlord made a claim that because payments of the rent and contended that the break clause
the tenant had to have fully complied with their were not made by standing order, a payment by had not been validly exercised.
obligations under the lease. A term of the lease cheque would defeat the break notice. This ground The court held that on a straightforward
provided that: “If any annual rent or any other of challenge failed. construction of the lease all obligations continued
money payable under this lease has not been paid The tenant had also put forward a proposition until its actual termination. That extended to
by the date it is due, whether it has been formally known as estoppel, i.e., if you don’t demand future rent. Therefore, there was a strict
demanded or not, the tenant shall pay the something then you are precluded from seeking construction of the obligation to pay the rent of
landlord interest at the default interest rate (both it in the future. This argument failed. The judge Stg£190,000 “by equal quarterly payments in
before and after any judgment) on that amount held that the facts of the case included: advance on the usual quarter day”.
for the period from the due date to and including n in the course of dealings between the parties, After paying a full quarter’s rent, the tenant should
the date of payment”. The break provisions were the landlord had agreed to accept cheques in then have sought a refund (if entitled).
very specific and the time for service of notice was payment of sums due under the lease;
short at three months. To terminate the lease on n there was no positive statement on the part of Important matters
the break date there were very detailed provisions the landlord which would give rise to estoppel; When negotiating leases, some things should be
and particular requirements as to the validity of a and, considered:
break notice and to the service of such a notice. n the landlord’s failure to tell the tenant that n attempt to agree unconditional break clauses in
One of the provisions was: default interest was due and owing did not raise return for break payments;
estoppel by acquiescence. n ensure that a refund provision is included in the
“At the break date any payment under this lease break option in relation to advanced payments
due to have been paid on or before that date has Overpay and then seek a refund for periods after the break date;
not been paid; or In the case of PCE Investors Limited v Cancer n avoid agreeing compliance with all tenants’
At the break date there is subsisting material Research UK, the lease provided for an annual rent covenants under the lease as a condition
breach of any of the tenant covenants of this lease of Stg£190,000 payable in equal quarterly precedent to the exercise of the break clause;
in relation to the state of repair and condition of payments. When the tenant served the break and,
the property; or notice, instead of paying a full quarter’s rent, they n if the landlord will not agree to remove certain
At the break date the tenant has not paid to the paid rent on a daily basis for the remaining period break conditions, make sure that compliance is
landlord a sum equal to six months annual rent”. of their tenancy, which was less than a full quarter. both possible and measurable.
*This is an edited version of an article that is available at: www.mcdowellpurcell.ie/break-clauses-in-commercial-leases/.
SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018 17Building
SuSTainaBiliTy
SuSTAINABILITy IS VITAL, AND A NEW SCSI WORKING
GROuP IS HELPING THE SOCIETy TO PLAy ITS PART
IN THIS NATIONAL CHALLENGE.
S ustainable development is often described as: “The ability to provide for our needs,
without compromising future generations’ ability to provide for their needs”
(Brundtland Report, 1987). When economic efficiency, environmental factors and
social equity are working in balance with each other, proper sustainability is achieved.
None of us can have missed the striking combination of hurricane, snow and drought we experienced
this year. Coincidence? Many don’t believe so. The evidence for rapid climate change is compelling.
Why do surveyors need to know about this?
Legislation and policy are changing fast, and I predict that they will change even faster in light of the
Eu fines coming our way from 2020. Sustainability impacts every part of the property industry.
Improving the energy efficiency of buildings will generate other economic, social and environmental
benefits. Better performing buildings provide higher levels of comfort and well-being for their
occupants, and improve health by reducing illnesses caused by a poor indoor climate.
As a valuation surveyor, I welcome the statement in the RICS Red Book that: “Valuers should be
aware of sustainability features and the implications these could have on property values in the
short, medium and long term”.
understanding sustainability is now mandatory to Level 1 in many Assessment of Professional
Competence (APC) pathways. Not only are ‘green’ buildings often worth more and future proofed,
their older counterparts are naturally suffering a ‘brown’ discount, and falling values. Green
buildings can command higher rents and prices, attract tenants more quickly, reduce tenant
turnover, and cost less to operate and maintain. Our clients’ need and demand to consider
sustainability should be foremost in our minds. Our biggest challenge (and opportunity) is
retrofitting the older stock, particularly residential. Hopefully, useful financial incentives will be
forthcoming from the Government soon.
feaTure
Eloise Heron
Valuation Surveyor and Chair of ACHIEVING SUSTAINABILITY
the new SCSI Working Group 10 Molesworth St (IPuT) is just one LEED Platinum-
certified building in Ireland.
18 SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018What are some of the key sustainability terms?
NZEB
Nearly zero-energy buildings (NZEBs) have very high
energy performance. The low amount of energy that these
buildings require comes mostly from renewable sources. The
Energy Performance of Buildings Directive requires all new
residential and commercial buildings to be NZEB by the end
of 2020. All new public buildings must be NZEB by 2018.
BREEAM/LEED
These are optional, but now very well-established and
expected, assessment methods of a property’s
sustainability performance. IPuT, Hibernia Reit and Green
Reit have all achieved LEED Platinum (the highest rating
possible) in some of the their properties.
GRESB
Launched in 2009, the Global Real Estate Sustainability
Benchmark (GRESB) focuses on researching and assessing
how real estate investment firms are incorporating
environmental, social and governance factors.
WELL Why is sustainability important to Ireland?
This is focused exclusively on human health and wellness, and Buildings are responsible for 40% of energy consumption and 26% of
is more concerned with the inside of the property and how it’s CO2 emissions in the Eu. Ireland is playing catch-up on our climate
run. The WELL Building Standard (WELL) combines best change obligations, and is facing massive Eu fines (estimated at up to
practice in design and construction with evidence-based medical €600m per annum from 2020) for failing to meet our current
and scientific research – encouraging the built environment as commitments.
a vehicle to support human health and well-being. Nine years ago, Ireland was given a target to reduce emissions of
greenhouse gases to 20% below what they were in 2005 by 2020. Ireland
HPI has consistently lagged behind in reaching this goal and is on target to
The Home Performance Index (HPI) is a standard that considers have reduced its emissions by less than 1% by 2020 (Climate Change
the quality of Irish residential development under three main Advisory Council).
categories: cost (of living in your home, including energy, water Project Ireland 2040 includes a climate action fund of over €500m, and
and transport); well-being (impact of the building on your well- outlines energy efficiency upgrades for 45,000 homes annually from
being); and, our planet (the impact your home has on your 2021, and energy upgrades to BER level B in a minimum of one-third of
carbon footprint). It is run by the Irish Green Building Council. Ireland’s commercial buildings.
The Sustainable Energy Authority of Ireland (SEAI) estimates that it could cost
Green leases €35bn to retrofit one million homes to 2050 carbon standards (€35,000 per
This concept aligns the financial and energy incentives of home). Despite being a large challenge, this presents amazing job
building owners and tenants so they can work together to save opportunities across the property sector. At present, with the current payback
money, conserve resources, and ensure the efficient operation for deep residential retrofits being in some cases over 10 years, the need for
of buildings. The research and published papers on the serious Government intervention in the form of proper grants is required.
rationale behind green leasing, or building performance
leasing as it is also called, has been ongoing for over a decade What is the new working group about and what are its goals?
and the case is well made. This is relevant to all surveyors and The SCSI has a brand new cross-sectoral Working Group on
legal practitioners, who are the lease drafters. Collaboration Sustainability in the Built Environment, and its purpose is to:
between landlord and tenant is a key part of making n keep abreast of sustainability issues, especially mandatory issues;
sustainability work, and often property owners who engage in n work together to help educate our fellow Chartered Surveyors on
and encourage dialogue on these matters will experience the sustainability issues through appropriate mediums; and,
greatest success in greening their portfolio. n help to form policy in the SCSI, and further afield.
SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018 19looking aT
limeriCk
IRELAND’S THIRD LARGEST CITy HAS HAD ITS SHARE OF BAD TIMES,
BuT THINGS ARE DEFINITELy ON THE uP.
w ith an international airport and port, three higher education
institutions, a young, educated population, and affordable
accommodation, Limerick is ripe for recovery after a long period
in the doldrums, and ‘Limerick 2030: An Economic and Spatial Plan’, has set the template for the
city’s revitalisation.
Key to its success is the development of world-class facilities and infrastructure for the city and county,
and that’s where the Limerick 2030 Strategic Development DAC (Designated Activity Company) comes
Living in Limerick
Average rent: €884 per month
(Residential Tenancies Board Rent Index, Q1 2018)
Residential property Limerick
City: €189,416
in. Chief Executive David Conway explains: “Limerick 2030 DAC is a special purpose vehicle company, (daft.ie House Price Report,
established to implement the development of the key strategic sites/services in the Limerick 2030 Q2, 2018)
Strategic Plan. We have the commercial focus to deliver these pieces of infrastructure, to create
economic and anchor development in the region”. Office rents per sq m.
An independent board made up of county councillors, directors of the City and County Council, and other Prime city rents, Q2 2018: €325
individuals with specific skillsets in property and construction, is led by Chairman Denis Brosnan. David Prime suburban rents, Q2 2018:
emphasises that this is a planned, integrated approach that owes its origins to the merger of Limerick €237 (Cushman & Wakefield, Limerick
City and County Councils in 2014. Currently focusing on five key projects (see map), it involves a rigorous Office Market Q2 2018 report)
pre-planning process, and finance from both the European Investment Bank and the Council of Europe
Development Bank, among others.
It’s an exciting and optimistic time, and David has great ambitions for where he would like to see
the city in five years’ time: “As a place that people would seriously consider coming to work and live, Mungret Park
and FDI companies doing their business out of Limerick. We’re giving an opportunity of choice. We’ve Masterplanning has begun on
Limerick 2030’s only purely
got a great lifestyle, we’re a lot cheaper to buy a house, and work–life balance is quite good, so I think
residential site, and phase one of 200
we’re a very attractive alternative outside Dublin to create a major economic hub and a place for people
houses will be delivered by 2021, but the
to live”.
site has the potential for four times that
amount of homes. David Conway
praises the Council’s work here in
feaTure feaTure providing schools and
David Conway John Buckley recreational facilities.
CEO, Limerick Director, Limerick
2030 DAC Cushman & Wakefield
20 SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018University of
Thomond Park King John’s Castle Limerick
Home of Munster Rugby, one of the Located on King’s Island in the Located on the banks of the
most successful and best supported heart of medieval Limerick, King Shannon, uL is home to almost 12,000
rugby clubs in the world. Extensive John’s Castle was built in the early 13th students. Known as ‘Ireland’s Sporting
renovation saw it reopen in 2008 with a century for the then ‘Lord of Ireland’. Campus’, it boasts Ireland’s first altitude
25,600 capacity, and the ground also These days, it’s a fantastic interactive training centre, an Olympic-sized
offers extensive conference and tourist attraction for all the family. swimming pool, and the National
banqueting facilities. Strength and Conditioning
Centre.
Riverfest
Limerick becomes a
mecca for families, foodies and
fun runners each May Bank Holiday
for the city’s premier summer festival,
Riverfest. Highlights include Riverfest on
the Shannon, the Riverfestival village in
Arthur’s Quay Park, the Bon Secours
Great Limerick Run and a
spectacular fireworks display.
Troy Studios
The closure of the Dell plant in
2009 was a devastating blow to
Limerick, but the 340,000 square foot site
is now home to Ireland’s newest film
studios. Troy Studios leases the premises
from the Limerick 2030 DAC, and will
shortly complete is first major
production, a spin-off from the
hugely successful Game of
Thrones.
Gardens
Cleeves Riverside International Opera site
Campus Due for completion and With almost four acres of space,
This 10 acre site, which is at pre- occupancy by Christmas 2018, this this mixed-use development will be a
planning stage, has enormous LEED Gold certified office development new home for the Revenue
potential for residential, commercial and will be the first Limerick 2030 project to Commissioners and a new city library, as
community use. Says David Conway: be completed. With over 100,000 square well as office space, and has the potential to
“We want to make sure to give this site feet of high-spec facilities, it will create up to 3,000 jobs. A draft scheme
back to Limerick. It’s going to be an create up to 800 jobs on the iconic has been approved, and it’s hoped that
iconic waterfront former site of the famous the full planning application will
development”. ‘Hanging Gardens’. be submitted by year end.
SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018 21STruggling To
ConveyanCe
THE CONVEyANCING PROCESS IS ONE WHICH SEEMS TO FRuSTRATE EVERyONE
INVOLVED IN IT. WE SPOKE TO THE DIFFERENT PROFESSIONS INVOLVED TO
SEE WHAT THE PROBLEMS ARE AND HOW THINGS COuLD BE IMPROVED.
S omething needs to change
with conveyancing.
main thing that emerged in
the Surveyors Journal’s conversations with the
The
professionals involved is that it takes too long to
sell a property in Ireland. Most recommended
that as much of the conveyancing process that
can be done before a property goes on the
market should be done then. This would save
time and reduce the number of sales falling
through during the process. Some believe we
should go further and do away with sale agreed
status altogether.
feaTure
Colm Quinn
Journalist and Sub-editor,
Think Media
22 SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018The solicitor – John Hogan, Leman Solicitors The building surveyor – Brian Duffy,
John says no property should be brought to the McGovern Surveyors
market without a contract of sale being ready, With pressure to get a survey done in a few days,
and that sale agreed status should be scrapped: timing is the major problem for building
“It’s causing much too much confusion and a lack surveyors: “By the time you do the survey, get it
of predictability about transactions. There should typed up, proofread it and get it back to the client,
be a statutory timeframe which states that if a turnaround time of a couple of days isn’t going
people have an offer accepted, they will have a to happen”.
contract within seven days and that they will sign that contract within Often during a survey, issues will arise, such as the discovery of structural
a further seven days”. alterations to the house or extensions that are not within planning
In Scotland, there is no sale agreed status: “An offer is a binding offer exemption limits. Brian believes all this should be revealed as soon as the
when it’s made. If you do not complete, you’re open to being sued. I vendor decides to sell the property: “There’s no point in letting it go the
think that’s a really good idea”. whole way to the survey and waiting for your survey report to come back
He says that solicitors can be resistant to change: “But change has to and there’s a number of queries that can draw the whole process out”.
sometimes be forced on a profession and I think that if surveyors will Another thing to consider is whether the boundaries are correct: “If
force solicitors into certain behaviours, that’s what will happen”. not, you might need to get a deed of rectification”.
He referenced the recent measures taken by Hunters Estate Agents, The only thing that should be left when a surveyor goes to do a survey is
where the firm will no longer accept a property to put on the market to look for any structural issues, the condition of the property, etc:
unless the solicitor has the contracts prepared. “Purchasers and solicitors are relying on us to give them all the correct
He believes the move towards digital is relentless and mentioned information. They’re relying on our experience and our expertise to ensure
systems like Bidx1 and Allsop, where titles and contracts are uploaded that everything is pointed out to them so they can have everything in place”.
and available for everyone to view and says that should happen in all Brian has a couple of key points:
house sales: “All documentation should be available online when the n give a realistic timeframe for getting the survey done; and,
house is put on the market so that solicitors can review and get n make sure your paperwork is in order before you put a property on
engaged in the process much earlier than they do at the moment”. the market.
The estate agent – Philip Guckian, Sherry The land surveyor – Sarah Sherlock,
Fitzgerald Murphy Surveys
When first selling a property, people tend to One of the most frustrating things for land
only contact their estate agent but Philip says: surveyors is that they aren’t typically engaged until
“We’d always suggest that vendors contact their there is a problem or time is very tight. Often,
solicitors the second they are thinking of going to everyone is waiting for the map to close the deal,
the market”. but Sarah says: “Land surveying takes time and is
There is a lot of work involved for solicitors and it’s not a desktop exercise. A ground truth survey is very
easier for everyone if they are instructed as early as possible. The property specific insofar as you actually have to survey the land and that takes time”.
could take a month to bring to the market but things could be done during It is not always as easy to deliver what the client expects, and especially
that time: “Contracts could start being prepared and brought to a point so at the last minute. It is not as simple as looking at a map: “Not every
where they are ready to go out the minute it goes sale agreed”. map is suitable for every purpose. unless you know who prepared the
One area where issues can arise is in land sales, particularly in the sale of map, when it was prepared, for what purpose it was prepared and if any
large amounts of land: “Getting all the maps and making sure all the lands changes have occurred in the interim, you really shouldn’t be using that
are registered; there’s a lot of stuff to prepare for the contract stage”. map. you should be going out and doing a new survey”.
To improve things, Philip thinks we should start with new builds. If you got Sellers should be instructing the land surveyor at the same time as the
that right, he says, that would be a good starting point. He believes that the agent and solicitor. All three can then work together to confirm that what
registration of land could be faster. He thinks that the estate agent’s role is the agent believes they’re selling is what the solicitor sees on the title, and
a little bit misunderstood by others. Agents are the link with everybody that what the land surveyor has captured on the ground is what appears on
involved in the sale, he says: “It’s [important to] update them on everything the contract map. Murphy Surveys is trying to increase efficiency by asking
in the process – communicating with the vendor, the purchaser, the clients for a summary from their lawyer confirming the full extent of what
purchaser’s solicitor and the vendor’s solicitor”. they wish to convey, complete with certified copies of the relevant deed[s],
He thinks that everybody would love it if there was a way to speed and with maps appended. This approach seems to remove unnecessary
up the process but that it will take a lot of discussion with those involved. confusion from the outset as to what exactly is intended and required.
SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018 23The fuTure
of reTail
WITH ONLINE SHOPPING SET TO TAKE OVER EVEN MORE FROM TRADITIONAL
SHOPS IN THE COMING yEARS, RETAIL SPACES WILL HAVE TO BECOME
MORE ABOuT ExPERIENCES AND LESS ABOuT TRANSACTIONS.
T he future of retail is a topic that
has been exercising minds over
recent years, not least in the
property world. The direction the market takes will
have significant implications for a whole myriad of
affected parties, including architects, developers,
landlords, surveyors, solicitors and agents alike.
unlike the uK retail sector, which has been
clouded by negativity for much of the last 12
months, Ireland’s has been performing solidly Below are some of the changes
with strong footfall, consumer sentiment and that we are likely to see:
retail sales activity recorded on the back of
supportive economic fundamentals and A new sense of place locations (both high
favourable demographics. However, many Although e-commerce will continue to evolve, street and shopping centres)
commentators strongly believe that the physical stores will also remain important, not will incorporate a greater proportion
growth of e-commerce and technological least as an outlet for consumers to interact with of leisure, food, beverage and cultural spaces to
advancements such as 3D printing will ultimately the brand’s omnichannel offer. The physical create experiences to attract footfall and enhance
sound a death knell for retail as we know it, which store will remain complementary to a brand’s dwell times, with a view to ultimately boosting
in turn is causing some investors to reconsider online offer. Even brands that sell exclusively trading volumes, both in store and online.
investing in this sector. online will increasingly look at opening flagship There will be increased focus on placemaking
While the number of physical stores might stores in certain high-profile locations to when designing new retail schemes or upgrading
decrease, this doesn’t mean people will shop showcase their brand. existing facilities. We are likely to see more high
less, simply that they will change their shopping The purpose of the traditional store will streets and retail hubs becoming pedestrianised
behaviours. I firmly believe that there will increasingly move from transactional to focus as a result.
continue to be a place for traditional retail, but more on service and experience. Retailers need to A greater mix of uses within retail locations is also
we must acknowledge that change is on the incorporate experiences that make consumers likely. Indeed, this was a central theme of the
horizon and, in this new paradigm, the retail want to return to their store. In reaction to recent Grimsey Review in the uK, which produced
sector will have to adapt or die. changing consumer behaviour, traditional retail 25 recommendations for reviving uK high streets.
feaTure
Marie Hunt
Executive Director and Head
of Research, CBRE Ireland
24 SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018This could result in libraries and public spaces, order and the goods are then delivered to you. understanding the profile of consumers in your
housing, healthcare and entertainment uses No more carrying shopping bags around town. target catchment will become increasingly
being located alongside traditional retail offerings. An increasing number of retail stores will facilitate important in determining store location, and the
In this new era, store performance will no longer trying on clothes virtually, with technologies that size and design of facility required. Retailers that
be measured in terms of sales per sq. ft but more enable you to virtually try on different colours, embrace innovation, including new data sources
on footfall volumes, online conversion rates and sizes and styles evolving all the time. These and analytics, will not only survive but thrive in this
dwell time. technologies will reduce the need for reverse new environment.
As millennials and generation Z (who have grown logistics, as well as reducing the amount of My personal favourite is that mundane purchases
up shopping online) get older, their spending inventory needed in each store, which in turn has will increasingly be automated as the divide
power will increase in tandem, which will provide implications for the store design in the future. between retail and leisure becomes increasingly
a significant boost to the evolution of e-commerce. We will see industrial 3D printers being blurred. As household appliances such as
A larger proportion of the floorspace within incorporated into high streets and retail locations dishwashers and washing machines evolve, they
existing retail stores will therefore be dedicated to as the technology improves and an increasing will automatically predict household usage
online fulfilment. number of goods are tailor made and personalised. patterns, and when supplies of dishwasher tablets
Store windows are likely to vary depending on who or washing powder are running low, will order
Embrace the tech is standing in front of them, with displays what is required.
Many stores will introduce robots to help changing to reflect the individual shopper’s In summary, it is clear to see that the retail sector
shoppers navigate the store and find particular preferences or the time of day. Storefronts will is going to experience significant disruption over
goods. This technology is already being used become virtual stores after hours as technology the next decade. As consumer shopping patterns
successfully in the uS, with ‘friendly’ robots that evolves. continue to change and omnichannel retailing
mimic human speech patterns serving customers evolves, this will result in significant changes to
in several stores. In home improvement chain Data mining how retail property is designed, fitted out, leased
Lowe’s, robots not only help shoppers to find The most successful retailers in the future will be and valued. The property sector will simply have
goods, but also provide DIy advice. those that analyse consumer data better. no choice but to embrace these changes.
We will continue to see seamless integration of
physical and digital retailing, with an increasing
number of stores acting as showrooms
Several Shoe SToreS in The uS and uk now aCT
facilitating online purchases in store and
rewarding customers for opting to purchase Solely aS ShowroomS. The STore proCeSSeS
online. Several shoe stores in the uS and uK now
act solely as showrooms. you can view and try on your online order and The goodS are Then
every colour and brand of shoe in store but can’t
buy anything. The store processes your online delivered To you.
SuRVEyORS JOuRNAL Volume 8, Issue 3, Autumn 2018 25You can also read
