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A common perception is that once the deal has been done and the asset has been fully let an asset manager can relax a little.

Unfortunately, that is rarely the case and, in fact, asset managers need to remain vigilant at all times and have clear oversight of the properties within their portfolios.

This was made abundantly clear in a recent case where Manchester City Council served an enforcement notice on the landlord of a café in Manchester’s Curry Mile. This happened because the landlord’s tenant had turned the café in part into a shisha bar without planning permission.

On receipt of the enforcement notice the landlord did nothing, presumably thinking it was the tenant’s problem. But then the landlord was prosecuted and ended up with a fine and costs bill of around £20,000.

In addition – and what has made the case stand out – under the Proceeds of Crime Act 2002, the landlord was also pursued to pay around £175,000 in respect of rent received from the tenant whilst the landlord was the subject of the enforcement notice.

Inaction here led to the landlord getting a financial hit, not once, but twice.

Freeth’s Darren Williamson commented: “You can’t take your eye off the ball when it comes to asset management whether you own or manage one or hundreds of assets.

“In this case, the landlord needed to act swiftly as soon as it got the enforcement notice to stop the breach.  Instead, the landlord just seemed to think it wasn’t their problem. Being a pro-active asset manager is vital in avoiding this and other issues.”

Chancerygate’s George Jerram said: “This case is a classic example of poor asset management where not reacting in a timely manner and assuming the tenant was at fault has cost the landlord dearly.

“At Chancerygate, we always try to look ahead and mitigate any issues that can arise on our portfolios as soon as possible.

“It is incredibly important to keep up with legislation and have good relationships with all our tenants. As the world of asset management continues to evolve so must we.”

Another area where asset managers can be caught out is by adverse possession. This is where there is occupation of a property by a third party without the consent of the property owner, effectively ‘adverse’ to the property owner’s interest.

If such occupation occurs over a certain length of time it enables the third party to claim ownership to the detriment of the ‘paper title’ owner.

Adverse possession is not that common in commercial premises, as to apply it requires a hefty ten year occupation by the third party. It also tends to arise more on mixed use properties or residential, but another recent case has a cautionary tale to tell.

This case involved a property owner challenged for ownership where they had allowed a third party to occupy the property for more than ten years on an uncertain basis. It was not clear if the arrangement was, or was not, with the permission of the property owner as there was nothing in writing.

Bizarrely, the third party argued it had been given permission to occupy the property and was a licensee which it seemed to think would enable it to gain possession as the owner had allowed it into possession.

This was strange as, ultimately, it defeated the claim for adverse possession as a property owner giving consent to a third party was contrary to the principle of adverse possession. The third party had to occupy without consent.

Whilst the case established no new law per se and was ultimately defeated by the owner due to the third party getting it wrong on being a licensee, it does point out the importance of an asset manager understanding what needs to be done to prevent any claim for adverse possession.

Keeping aware of who is in the property regularly, and for how long, and appropriately documenting that, or regaining possession at an early stage, is crucial for the asset manager to retain control.

George added: “It might seem obvious to know who your tenants are and who you are collecting rent from. However, with long term income, it is important to keep aware of what the situation is and maintain a line of communication with your occupiers.

“Regular inspections and meetings to establish what tenants want to do will go a long way to preventing costly mistakes. If in doubt, legal advice at the outset is significantly cheaper than a protracted possession claim.”

Darren remarked: “It foxes me as to why the claimant tried to make out an argument based on being given consent, which clearly defeated its claim.

“That said, whilst you find adverse possession more in the residential context, this a trap that an asset manager or property owner of mixed use or commercial property could potentially fall into.

“This is particularly the case if they are managing a vast portfolio. For instance, a third party could move in when another tenant is not in occupation.

“Alternatively, a third party can come in and do, or be doing, something perhaps beneficial, such as paying rates or refurbing, and no agreement is put into place.

“It can get very messy if not dealt with correctly and proactively at the beginning of the arrangement.”

To discuss your real estate legal requirements, contact Darren Williamson at Freeths on DL: 0345 634 1742, M: 07801 530 444 or E: darren.williamson@freeths.co.uk.

 To find out more about Chancerygate’s urban logistics assets portfolio, call George Jerram on DL: 020 7657 1854, M: 07817 475 371 or E: gjerram@chancerygate.com.

Established in 2020 by Chancerygate founder Andrew Johnson and his wife Vanzel Johnson, the Chancerygate Foundation’s purpose is to address the lack of diversity within the property sector.

Through its work, the Foundation provides financial and personal support to British African and Caribbean young people to ensure they can first access a career in property and then thrive within it.

As the first initiative of its kind focused on British African and Caribbean people, the Foundation and the individuals it supports are trailblazers who want to ensure lasting, positive change in the property sector.

In this article, we explore why, and how, the Chancerygate Foundation is doing the work that it does.

Creating a diverse and inclusive property sector

Today, many sectors are increasingly prioritising diversity and inclusion in their environmental, social and governance (ESG) commitments.

However, this is a significant challenge for the property sector. Last year, only one per cent of RICS members who qualified identified as black and they make up just two per cent of total members.

Traditionally, access to a career in property depended heavily on factors such as schools attended, socio-economic background and existing networks within the sector.

These same factors also contribute to preventing people from minority backgrounds reaching senior management positions.

Without action, there is a risk of no real, or sustainable, progress being made to ensure long-term diversity and inclusion within the property sector.

It is this situation which the work of the Chancerygate Foundation intends to help remedy and, in doing so, drive meaningful and lasting change.

Commercial and societal benefit

It is clear that implementing robust diversity and inclusion strategies create significant commercial benefits.

They enable organisations to utilise the skills of a broader range of talents with different lived experiences and viewpoints. This, in turn, creates a more dynamic workplace culture where people’s individuality, and the skills and insight they have, is key to delivering positive commercial outcomes.

We see direct evidence of this at the Foundation. For example, one student we support would like a career in property to improve the lived experiences of those who come from a similar background and are often subject to poor housing conditions.

An effective diversity and inclusion strategy can also be a commercial differentiator against competitors, with socially responsible clients wanting to collaborate with organisations that share their values.

Opening doors

The Foundation works with British African and Caribbean students studying RICS-accredited courses to help them get a strong start to their career and prepare them for success.

This sees us directly involved with students as they plot their career choices. In addition, we help them gain work experience in the property sector, particularly those who have had no prior opportunity to do so.

The Foundation recognises that, for many of these students, going on to study for a degree will be a daunting prospect as they will often be the first in their families to go to university.

This can mean they do not necessarily have access to the support their student peers benefit from, including financial assistance.

One of the fundamental elements of the Foundation’s activity is our bursary programme which provides up to £10,000 per annum, per student towards their living costs.

This level of financial support can give them the confidence and security to commit to further studies without being required to take on any outside jobs to pay their way through university and potentially put their studies at risk.

Sharing insights and experience

In addition to financial support, the Foundation also works to ensure students have access to guidance.

This is delivered by our mentoring programme which provides a combination of academic, personal and professional support for the students.

Each student is paired up with a member of the Chancerygate team and our affiliates who act as a mentor. Drawing on their experience and insights, each mentor provides students with advice through their studies and when they are considering their career plans.

The Foundation director acts as a hub for all connected parties, students, mentors and academic institutions, ensuring that when challenges or opportunities arise, advice is available.

Lessons not learnt at school

Complementing the opportunities created by the Foundation are our efforts to ensure students develop the “soft skills” required to have a successful career in property while maintaining their identity.

Students from underrepresented backgrounds might not have had exposure to these skills compared to those who traditionally dominate the sector as they are skills which cannot be taught in a classroom.

They comprise understanding the world of business and property, observing professional standards and developing the interpersonal skills and confidence needed for networking and negotiating.

By focusing on this, it helps us develop well-rounded students with soft skills equal to those of their peers when they start their careers.

Trailblazers don’t stop

Many of Chancerygate’s peers have recognised the Foundation’s importance and have praised its work to curate success in those it supports.

We are proud that the Foundation and the students it supports are regarded as trailblazers. However, we know the Foundation must continue to build upon the momentum we have achieved and be focused on delivering more diversity within the UK property sector.

The Chancerygate Foundation works with a range of industry partners including universities, schools and businesses in property and real estate. To find out more or discuss any opportunities, call Amanda Walker on M: 07703344043 or E: awalker@chancerygate.com 

In early 2023, Chancerygate appointed Jason Sharman as its first European director as part of an ambitious expansion strategy.

With a 24-year career working in central Europe, Jason has extensive knowledge of the European property, multi-let industrial (MLI) and urban logistics markets and has gathered key insights into what shapes regional real estate decision making.

In this article, Jason provides an initial insight into our European strategy and explores target opportunities.

Why expanding into Europe makes sense

Since it was founded in 1995, Chancerygate has grown to become the UK’s largest urban logistics property developer and asset manager, and the only developer operating nationwide.

We believe that the fundamental drivers of this growth are as relevant across Europe as they are in the UK with a strong focus on:

• Established urban logistics locations appealing to occupiers seeking small and medium size units and in close proximity to population hubs and strong infrastructure links.
• Institutional grade standard specification providing a continuing level of quality appealing to occupiers, funds and lending institutions.
• A variety of unit sizing options with a strong focus on sustainability and green credentials including electric vehicle charging points and solar power as standard.
• Inherent imbalance of supply and demand of Grade A accommodation with a concentration of older stock which does not meet the needs of the modern, and increasingly varied, occupier.

Our European strategy will consider both leasehold and freehold (unit by unit) disposals offering a point of difference to our competition.

The initial steps of our European growth journey were taken in 2022 with the acquisition of a site close to Dublin airport where planning is anticipated shortly with a start on site in Q1 2024. Details of our proposed development, called Airport Trade Park, are available here.

We anticipate announcing the recruitment of a country manager for Ireland shortly to facilitate further growth in this market.

The next stage of growth will comprise the acquisition of our first sites and establishing a presence in the Iberian markets.

Iberia

There are several reasons as to why we have concluded that Iberia represents an ideal starting point for our European growth including prevailing economic conditions, occupier, and competitor dynamics.

Despite ongoing global economic challenges, Spain and Portugal benefit from stable economies, with overall positive GDP growth projections post 2023.

The Iberian economies contain an unusually high concentration of SMEs which drive demand for the unit size and scheme configuration that we aspire to deliver.

Another factor driving causal demand is the poor quality of available units. The quality of existing stock providing units of comparable size is almost wholly secondary and highly granular which are poorly laid out and with high site coverage.

Modern tenants are desperate for higher quality accommodation which better reflects their brand values. This stock is simply not available.

This presents an opportunity for Chancerygate to leverage our best-in-class designs, layouts and specifications to benefit occupiers.

The vast majority of international and local industrial developers operating in Iberia tend to focus on big box and last mile developments. This leaves a gap in in the less congested space of the urban logistics market.

We believe that the Iberian urban logistics sector presents an attractive risk:return profile with supply demand dynamics that will be accretive to strong rental growth in the short term. This profile also makes the market attractive to institutional investors and funders.

We are initially exploring sites in Lisbon, Madrid and Barcelona as they are more established, larger markets with strong occupier and investor diversity. Our target sites are between one and six hectares, in existing industrial locations with transport links providing a 20-40 min drive from city centres.

Once established we envisage expanding to the other key population hubs such as Porto, Valencia, Malaga and Bilbao.

We intend to bring the core design elements of the proven Chancerygate product to these regions, carefully merging these with the specific elements required by occupiers and planners in the region.

Inherently, we will ensure that occupiers are able to benefit from flexible, high-quality units that are aesthetically pleasing, efficient and provide a point of difference to that offered in the market currently.

Establishing a local presence

Setting up a local presence through regional offices forms an essential component of our European expansion strategy.

Having a local team facilitates a stronger brand presence and fosters meaningful relationships with agents, municipalities, occupiers and the wider real estate community. It also enables us to react faster and improve decision making to source strong development opportunities.

We are therefore in the process of setting up offices in Madrid, Lisbon and Dublin with an aim to have personnel in each by the end of 2023.

Sustainability

Importantly, as we embark on this journey, we will not lose sight of our commitment to be market leaders on sustainability. We will maintain our focus with a clear, positive and proactive ESG agenda, developing highly sustainable, market-leading institutional quality schemes.

 Setting new trends in Europe

This is an exciting time for us at Chancerygate and a new chapter for the business as we work to graduate our best-in-market schemes from the UK to Europe.

 We are focused on bringing forward adaptable and highly functional schemes on the continent which are developed on brownfield sites close to infrastructure links for SME occupiers.

 After establishing our initial European presence in Iberia and Dublin, our medium term ambition is to establish a network of operations across Europe.

 Embedded in our strategy, our overarching plan is to offer flexible, sustainable high quality product to market to support occupier demand. This, in turn, will also open new opportunities for institutional investors funders.

 Chancerygate is identifying opportunities for growth in the European urban logistics market through acquisition of development sites and value add investments. To find out more or discuss any opportunities, call Jason Sharman on M: 07385 297250 or E: jsharman@chancerygate.com