commercial property lambert smith hampton

Our work - 01/01/2013

Rent review arbitration for an industrial mill

We were instructed to undertake a long outstanding rent review of a 130,000 sq ft textile mill in Huddersfield

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Long outstanding rent review

The property, which was originally let to a textile manufacturer for a 25 year term in 2001, comprised historic multi-storey mill with a modern industrial accommodation addition situated within a residential area.

The initial annual rent was relatively low owing to the lease having been put in place by the former textile business owner following a management buy-out.

The first rent review to open market rent in 2006 remained outstanding four years after the review date, with no agreement being reached between the parties as to what the rent should be following rent review.

Complex market conditions

Providing an historic pre-financial crisis valuation of the traditional mill premises, while taking appropriate account of the modern additional warehouse and other configuration issues, proved particularly challenging. As such, the matter was referred to arbitration, with our surveyor acting as an Expert Witness on behalf of the landlord.

Drawing upon our extensive comparable evidence, we were able to provide the arbitrator with validated historic rental evidence going back six years.

We also provided advice on the detailed aspects of the rental valuation at rent review, incorporating the effect of the repairing covenant in the context of the building specification and the relevance of obsolesence.

Rental increase of 43%

The arbitrator accepted our opinion for an increase to the initial rent, and awarded a rent increase of 43%, bringing the rent into line with an open market rent.


The costs of the arbitration were shared equally between the parties, this being recovered by the landlord from less than six months of the rental increase achieved.


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