42% rent increase wanted by council for industrial premises

sharonace

Hope someone can help. We have been based in a council owned industrial unit on a 9 year, rent review 3 yearly, for 18 years. The rent has always increased every 3 years at a reasonable amount but not this time.
Our lease is up for renewal in a couple of months and the council have written to say that they are willing to renew our lease, but the increase works out to 42%. If we are willing to pay the new rate then the lease will be terminated.
Does anyone know, or can point me in the direction, of where I can work out what the increase should be based on inflation since 2005.

fguk

I am no maths expert, hopefully someone like that will be along soon....

However, keeping the above in mind, if you have 2.5% inflation for the last three years, and you compound it, i reckon that is no more than a 10% increase over the total period.....

The other thing that struck me is that the council won't be able to let it too someone else, or sell the building, or redevelop it at the moment (The amount of industrial and other property not being filled, and some not even being finished built around me is unbelievable)....I think you have good grounds to negotiate!

vivatifosi

fguk wrote: »

The other thing that struck me is that the council won't be able to let it too someone else, or sell the building, or redevelop it at the moment

Generally this is true, but in many places there can be a shortage of units for very small businesses. Though I do think a hefty rise in the current climate is a bit mad. Developers often don't like developing small premises because they can be a PITA and they prefer bigger schemes with known, established, tenants. Therefore, if you have a small business it may be worth seeing what else is available. There are often small business incubation schemes in place that are run or funded by government bodies, but not the local council. Have you tried your local enterprise agency?

Also, I'm assuming there are other tenants on the same site and likely to have similar terms, what are they planning to do?

I'd also speak to my local councillor and say do they realise that the council risks losing jobs if you are forced to move. In the current climate that would be very unpopular and they may have some leverage.