Welcome to Shop Investment
For investors, landlords and lenders, Shop Investment is everything to know about investing successfully in shop property if only someone had the time to tell you.
Investment in shop property can be rewarding, providing you know what you are doing. Many people like to think they do know, but invariably find out the hard way that they do not: for example, when, after coming up against me or another experienced surveyor advising the tenant, the outcome is not what they had in mind; or when an investment bought using a mortgage plummets in value and the bank wants its money back, or when the tenant vacates or goes bust and the landlord ends up with an empty building.
Commercial property is not like investing in the Stock Market or buy-to-let residential property, and shop property not like any other type of commercial property. How you go about buying and selling shop property requires skill and experience, not only in the art and science of timing, but also in interpretation and use of business tenancy law and shop rental valuation. It’s no good jumping to conclusions or gauging prospects based on media reports, or buying whatever takes your fancy: for example, a difference in value can exist between a property and an investment; a trading position may not be all it seems; how much you could buy the proposition for now compared to what it was priced at not that long ago may not be good value, and just because it would cost more to build the property doesn’t mean it’s worth buying.
Much of what goes wrong is self-inflicted: whether from inexperience, gullibility, to not listening to what the investor doesn’t want to hear. For example, the landlord owns the property, not the tenant’s business; and a difference can exist between the value of the property and the value of the investment. Amongst the mistakes investors make when buying a shop property investment, possibly the three biggest are: 1) buying yield; 2) buying the tenant's covenant; 3) “upward-only” rent review.
Unless you are a property trader/dealer, investor thinking tends to be for long-term investment, often buy to keep indefinitely. The long-term is a long time, so problems in the making can take a years to manifest and may not be apparent until long after the obvious has faded away. In 1995, in my essay on the Future of Town Centres and Retailing, and for which I won a prize in a competition sponsored by Marks & Spencer, I reasoned the underlying problem at a macro-level is a conflict between whether the British economy is fundamentally capitalist or socialist. On one hand, the role of capitalism is to weed out; on the other, socialism steps in to prevent falling by the wayside. Progress suffers from being driven with the brake on, with too much duplication and compromise, and not enough original thinking and consistency in direction. It only needs a few to seize the moment for the rest to flounder. In an atmosphere of competition it is illogical to expect every retailer to be successful, and not every property is going to be a good investment.
Much of the outpouring of media journalist chatter and pr commentaries I wrote about years ago in my newsletters. In retailing, demand has been polarising for decades. In 1984, I wrote about changes in the offing, and how to identify the warning signs of a location and trading position in decline. In June 1989, I said that the emergence of the ‘Green’ consumer marked the onset of a major shift in attitude that would have repercussions for all aspects of future retailing. In June 1998 I said the lethal combination of rising costs and flat demand suggests that the shopper is concentrating on fewer retailers. In 2010, I said the era of mass-market multiple retailing is over and the consequences are going to have far-reaching repercussions for investment performance; in 2012, the decline and fall of many multiple retailers is already making its presence felt.
Michael Lever
A commercial property surveyor, involved in the retail property market since 1967, 45 years, I specialise in rent review and business tenancy advice for landlords and retailers in England and Wales, I have dealt with more than 5000 properties and many Clients have used my services regularly since 1975. [Born 1949 in Ealing, educated at City of London School, my commercial property career began at Montagu Evans, London in 1967. In 1971, I joined my late father's firm, Fineman Lever & Co, Chartered Surveyors. In 1975, I established my practice in Harrow, NW London when I pioneered the idea of specialising in rent review and lease renewal. In 1993, I moved my office to Ledbury, Herefordshire.]
As well as advising clients, I contribute to professional wisdom and market intelligence by writing about rent review, business tenancies, and retail property.
In 1978, I published a pamphlet "The Framework of Rent Review Clauses" which was given publicity in leading law and property journals. In 1983, I published a 28-page booklet ' How to do a Rent Review’; priced at £5 it was an instant hit at more than two thousand sales; and in a letter to me was described by Professor John Ratcliffe, then Dean of the Faculty of the Built Environment at the Polytechnic of the South Bank, London as an "excellent digest of a particular complex area of professional practice and study". In 1984, I published a booklet, reprinted 1988, entitled “Investment in Secondary Shops” and in 1988 “How to Read an Auction Catalogue” : more than 1500 booklets were sold and many landlords have used my services ever since. In 1988 I published a booklet "The Psychology of Rent Review Negotiation" and after that numerous pamphlets and newsletters; and over the years, my contribution to the world of rent review is such that many of my original ideas nowadays pervade popular thinking.
My publications are welcomed by solicitors, barristers, chartered surveyors, accountants, students, public and private property companies, private investors, banks, and multiple retailers. My letters and articles appear in Estates Gazette, Law Society's Gazette, Solicitors' Journal, Chartered Surveyor, Arbitrator, Estates Times, The Grocer, Ledbury Reporter, Financial Times, Property Law Bulletin, Central (Institute of Directors), Investor's Chronicle, Property Week and Retail Week. I contribute to the Property boards of Motley Fool UK; and I can be found on Twitter.
I am mentioned in a Blundell Memorial Lecture and in a 'footnote' in 2 law books - 'Land Options' by Barnsley (1980); and 'Drafting Business Leases' by Lewison (1981) (nowadays Sir Kim Lewison of the Supreme Court). In 1984, I launched Quarterly Commentary, later renamed Current Review, my newsletter about rent review, investment and retailing. In 1995, I was awarded a prize for my essay on the Future of Town Centres and Retailing in a competition sponsored by Marks & Spencer. In 1996, I received a Certificate of Academic Standing from the Law Society. I have experience as executor and trustee. I am a member of the Shop Agents Society.
Shop Investment is a *FREE* newsletter, approximately 16-20 pages at regular intervals, and to begin with I’ll also send you the free ML Guide “An Introduction to Shop Investment”. To be on the free mailing list please email your name, company (if any) and full postal address to help@michaellever.co.uk
I look forward to helping you in some way.
Michael Lever
PLEASE NOTE: I respect privacy, your details will never be shared with or sold to third parties: I am registered under the Data Protection Act. By “FREE” I mean free of charge, no money to pay, no obligation to use my services. What’s in it for me is goodwill: what’s in it for you is everything to know about investing in shop property if only someone had the time to tell you.
For investors, landlords and lenders, Shop Investment is everything to know about investing successfully in shop property if only someone had the time to tell you.
Investment in shop property can be rewarding, providing you know what you are doing. Many people like to think they do know, but invariably find out the hard way that they do not: for example, when, after coming up against me or another experienced surveyor advising the tenant, the outcome is not what they had in mind; or when an investment bought using a mortgage plummets in value and the bank wants its money back, or when the tenant vacates or goes bust and the landlord ends up with an empty building.
Commercial property is not like investing in the Stock Market or buy-to-let residential property, and shop property not like any other type of commercial property. How you go about buying and selling shop property requires skill and experience, not only in the art and science of timing, but also in interpretation and use of business tenancy law and shop rental valuation. It’s no good jumping to conclusions or gauging prospects based on media reports, or buying whatever takes your fancy: for example, a difference in value can exist between a property and an investment; a trading position may not be all it seems; how much you could buy the proposition for now compared to what it was priced at not that long ago may not be good value, and just because it would cost more to build the property doesn’t mean it’s worth buying.
Much of what goes wrong is self-inflicted: whether from inexperience, gullibility, to not listening to what the investor doesn’t want to hear. For example, the landlord owns the property, not the tenant’s business; and a difference can exist between the value of the property and the value of the investment. Amongst the mistakes investors make when buying a shop property investment, possibly the three biggest are: 1) buying yield; 2) buying the tenant's covenant; 3) “upward-only” rent review.
Unless you are a property trader/dealer, investor thinking tends to be for long-term investment, often buy to keep indefinitely. The long-term is a long time, so problems in the making can take a years to manifest and may not be apparent until long after the obvious has faded away. In 1995, in my essay on the Future of Town Centres and Retailing, and for which I won a prize in a competition sponsored by Marks & Spencer, I reasoned the underlying problem at a macro-level is a conflict between whether the British economy is fundamentally capitalist or socialist. On one hand, the role of capitalism is to weed out; on the other, socialism steps in to prevent falling by the wayside. Progress suffers from being driven with the brake on, with too much duplication and compromise, and not enough original thinking and consistency in direction. It only needs a few to seize the moment for the rest to flounder. In an atmosphere of competition it is illogical to expect every retailer to be successful, and not every property is going to be a good investment.
Much of the outpouring of media journalist chatter and pr commentaries I wrote about years ago in my newsletters. In retailing, demand has been polarising for decades. In 1984, I wrote about changes in the offing, and how to identify the warning signs of a location and trading position in decline. In June 1989, I said that the emergence of the ‘Green’ consumer marked the onset of a major shift in attitude that would have repercussions for all aspects of future retailing. In June 1998 I said the lethal combination of rising costs and flat demand suggests that the shopper is concentrating on fewer retailers. In 2010, I said the era of mass-market multiple retailing is over and the consequences are going to have far-reaching repercussions for investment performance; in 2012, the decline and fall of many multiple retailers is already making its presence felt.
Michael Lever
A commercial property surveyor, involved in the retail property market since 1967, 45 years, I specialise in rent review and business tenancy advice for landlords and retailers in England and Wales, I have dealt with more than 5000 properties and many Clients have used my services regularly since 1975. [Born 1949 in Ealing, educated at City of London School, my commercial property career began at Montagu Evans, London in 1967. In 1971, I joined my late father's firm, Fineman Lever & Co, Chartered Surveyors. In 1975, I established my practice in Harrow, NW London when I pioneered the idea of specialising in rent review and lease renewal. In 1993, I moved my office to Ledbury, Herefordshire.]
As well as advising clients, I contribute to professional wisdom and market intelligence by writing about rent review, business tenancies, and retail property.
In 1978, I published a pamphlet "The Framework of Rent Review Clauses" which was given publicity in leading law and property journals. In 1983, I published a 28-page booklet ' How to do a Rent Review’; priced at £5 it was an instant hit at more than two thousand sales; and in a letter to me was described by Professor John Ratcliffe, then Dean of the Faculty of the Built Environment at the Polytechnic of the South Bank, London as an "excellent digest of a particular complex area of professional practice and study". In 1984, I published a booklet, reprinted 1988, entitled “Investment in Secondary Shops” and in 1988 “How to Read an Auction Catalogue” : more than 1500 booklets were sold and many landlords have used my services ever since. In 1988 I published a booklet "The Psychology of Rent Review Negotiation" and after that numerous pamphlets and newsletters; and over the years, my contribution to the world of rent review is such that many of my original ideas nowadays pervade popular thinking.
My publications are welcomed by solicitors, barristers, chartered surveyors, accountants, students, public and private property companies, private investors, banks, and multiple retailers. My letters and articles appear in Estates Gazette, Law Society's Gazette, Solicitors' Journal, Chartered Surveyor, Arbitrator, Estates Times, The Grocer, Ledbury Reporter, Financial Times, Property Law Bulletin, Central (Institute of Directors), Investor's Chronicle, Property Week and Retail Week. I contribute to the Property boards of Motley Fool UK; and I can be found on Twitter.
I am mentioned in a Blundell Memorial Lecture and in a 'footnote' in 2 law books - 'Land Options' by Barnsley (1980); and 'Drafting Business Leases' by Lewison (1981) (nowadays Sir Kim Lewison of the Supreme Court). In 1984, I launched Quarterly Commentary, later renamed Current Review, my newsletter about rent review, investment and retailing. In 1995, I was awarded a prize for my essay on the Future of Town Centres and Retailing in a competition sponsored by Marks & Spencer. In 1996, I received a Certificate of Academic Standing from the Law Society. I have experience as executor and trustee. I am a member of the Shop Agents Society.
Shop Investment is a *FREE* newsletter, approximately 16-20 pages at regular intervals, and to begin with I’ll also send you the free ML Guide “An Introduction to Shop Investment”. To be on the free mailing list please email your name, company (if any) and full postal address to help@michaellever.co.uk
I look forward to helping you in some way.
Michael Lever
PLEASE NOTE: I respect privacy, your details will never be shared with or sold to third parties: I am registered under the Data Protection Act. By “FREE” I mean free of charge, no money to pay, no obligation to use my services. What’s in it for me is goodwill: what’s in it for you is everything to know about investing in shop property if only someone had the time to tell you.