Dorsey London Real Estate Updates

UK Commercial Real Estate Stands Tall amid Brexit Talks and a Snap General Election

For the past 12 months, politicians and commentators have remained fixated on Brexit. As negotiations for the UK’s exit from the EU begin, the commercial real estate market in the UK appears up-beat. The post-referendum uncertainty that initially impacted the commercial real estate market appears to have passed; first quarter figures for 2017 were at their strongest since 2014, with almost £5bn of commercial real estate transactions taking place. The Head of City Investment at CBRE noted that this was “a great endorsement of London’s continued appeal and testament to its resilience and ability to adapt and diversify”. The second continue reading...

UK Real Estate Aims for a “World’s First”

The Government has published a consultation document, proposing the introduction of a public register that details the identity of the ultimate owners behind foreign companies that purchase real estate in the UK. It is said that no such register currently exists in the world.  UK registered companies are already subject to such a requirement as they are obliged to maintain a register of their beneficial owners at Companies House. The catalyst to extend such transparency to overseas companies appears to have surfaced amid concerns that UK real estate is being used by international criminals to launder the proceeds of their continue reading...

MIPIM Expects…

Cannes next week – for members of the global real estate fraternity, this is the place to be (and to be seen).  Property people from over 90 countries are presented with a unique opportunity to evaluate the real estate market, placing their yardstick on both the public and private sector.  In addition to this, the hypothetical foundation stone of the real estate sector is truly at the heart of MIPIM.  That is, establishing personal contacts and building relationships. Amongst the conjecture (which will inevitably include Brexit, US politics and this week’s UK Spring Budget), we expect the following to be continue reading...

Middle Eastern Investment in London’s Commercial Real Estate Gains Strength

Financiers from Middle Eastern states are making substantial investments into commercial real estate in London, in contradiction to negative headlines regarding Brexit.  Indeed, figures show that investment from the Gulf actually increased post-Brexit; of the £1.8 billion ploughed into London’s commercial real estate in 2016 from investors in the Middle East, the vast majority (£1.2 billion) came after 23 June. Investors from the region are attracted to prime freehold assets, upward rental trends, long leases and capital growth which offer a “quasi bond-type investment”.  Add to that the weakening of sterling, which recently benefited the Abu Dhabi Financial Group when continue reading...

Buy-to-Let Investors Turn to Commercial Property

Buy-to-let investors are increasingly turning away from residential properties, with some reports stating that the number of those jumping ship to the commercial sector has recently tripled. This shift has been spurred by two major upheavals in the market: last April, the former Chancellor of the Exchequer introduced an extra 3 per cent stamp duty for buy-to-let transactions and from April of this year a phased reduction in the amount of mortgage interest rate relief that buy-to-let landlords can claim is being introduced. Mooted proposals to close fiscal advantages related to purchasing buy-to-let properties via corporate vehicles have also acted continue reading...

Brexit – Real Estate Update

In the run-up to the referendum, many of the headlines focused on the economy and immigration. Little was made of the real estate market, which is surprising given that it is reported to be worth nearly £7 trillion; account for 35% of the value of the U.K.’s stock market and 44% of government bonds; raise £15 billion of revenue each year through taxes; and employ almost a million people.  This post focuses on what impact the exit from the EU will have on property in the U.K. From a purely legal perspective, real estate has not been greatly affected by continue reading...

Consultation on the Privitisation of the Land Registry

The Land Registry has been in existence for over 150 years and holds a pivotal role in recording the ownership of, and interests in, land and property in England and Wales. Its registers cover more than 24 million titles worth over £4 trillion. In the 2016 Budget, the Chancellor of the Exchequer announced that the Government will consult on options to privatise the operations of the Land Registry. The Consultation Document was launched on March 24, seeking views on different models for the privatisation of the body. According to the Consultation Document, the Government’s logic for change is whether or continue reading...

Stamp duty land tax reforms

Stamp duty land tax – Reform of charging provisions for non-residential property In his Budget 2016 speech, the Chancellor announced changes to the rules for calculating the stamp duty land tax (SDLT) charged on purchases of commercial properties, as well as transactions involving a mix of residential and commercial properties. From 17 March 2016, SDLT will be charged on a new ‘slice’ approach, in place of the previous ‘slab’ system. This approach means that SDLT on commercial properties will be charged at a rate on the portion of the purchase price which falls within each of the three new rate continue reading...

Competition law and commercial property leases

On 26 November 2015, the Court of Justice of the European Union (CJEU) handed down its judgment in Case C-345/14 Maxima Latvija on the application of competition law to a non-compete clause in a commercial property lease. The CJEU had assessed contractual clauses in commercial leases that enabled a Latvian food retail chain to oppose shopping centres’ tenancy agreements with competing retailers. Background In April 2011, land transactions were brought within the ambit of Chapter 1 of the Competition Act 1998, which prohibits anti-competitive agreements. Since then, any clauses in a lease or transfer which have as their object or continue reading...

Business Rates: Looking Ahead in 2016 – The Good, The Bad and The Maybe

Business rates are charged on the majority of commercial properties, such as shops and offices, and represent one of the largest overheads for businesses. They are calculated using the rateable value of the property (the amount of rent reasonably obtainable for the property) and the relevant multiplier, as set by the Department for Communities and Local Government. This regime is braced for a set of developments this year, not all being beneficial to owners and occupiers of commercial property. These include the following: (i) Enterprise Zones Enterprise Zones were introduced by the Government to create hubs of economic growth through continue reading...