Successful Asset Management Brings About the Best Solution

In 2015 Jaggard Macland acquired 8-9 College Place in Southampton for a property company. The purpose of the office space was to produce income. Two tenants were secured, leases negotiated and Jaggard Macland managed the space for eight years. Part of the remit included negotiating lease renewals to maximise the return for the client.

In 2023, the leases expired for both tenants and it was clear to Jaggard Macland’s property experts that the solicitors occupying the majority of the space weren’t going to renew. The specification of the office was dated and the workplaces required by occupiers have undergone far-reaching changes post-pandemic. Businesses are looking for better space, but less of it, and to bring 8-9 College Place to the standard required to secure another long business lease was going to be costly and time consuming.

Jaggard Macland considered the alternatives for the asset for the client, analysing the potential opportunities and pitfalls associated with each option. As well as the cost implications, expert knowledge of the market meant we understood that even if the investment was made in refurbishing the office space, there were still drawbacks, including the configuration and size of space and its location.

The other alternative was to consider alternative uses for the property, with the most obvious being conversion to residential. Permitted Development Rights existed in the location of the office so Simon Harper of Jaggard Macland knew this was a viable option. When considering change of use it is important to understand the conditions involved in the legislation. In this case, the property needed to be vacant for a minimum of three months before an application could be made to confirm the rights were available.

Jaggard Macland quickly understood that this residential conversion needed a specialist developer with a detailed knowledge of the market and local planning. We advised the client against undertaking the works themselves and instead recommended the sale of the property on a conditional basis.

Finding the right buyer was central to the success of the sale and Simon identified a local property developer, Aycer Homes, who had experience in the area with similar conversions. He recognised the specialist expertise of Aycer Homes and approached them with an offer to purchase the property off market.

A situation that could have incurred large losses was expertly managed to produce a favourable outcome for our clients, Aycer Homes, and the building itself.

Simon managed all negotiations with the developer. Terms were agreed and the Rights were confirmed at the end of 2023, with the completion of the sale taking place in January 2024.

Knowing when to cut your losses and reinvest elsewhere is central to any successful property portfolio and is one of the (many!) reasons our clients work with us. This was the right asset management solution, executed well.