Why Doing Nothing Can Be the Biggest Risk in Commercial Property Portfolio Management

The Property and the Relationship

Jaggard Macland originally acquired 16 Blenheim Road for our client over a decade ago. The property is a 16,114 sq ft self-contained industrial unit with offices, set on a 0.4 hectare freehold site at the Longmead Business Park, about a mile north of Epsom town centre.

Over the years, we managed the asset, handled lease renewals and negotiated the rent reviews. The property performed well. The tenant, Solus (London) Ltd, a vehicle damage repair business wholly owned by insurer Aviva, had been in occupation since 2001. This was a solid, well-managed investment doing exactly what it should.

However, as the existing lease included flexibility for the tenant to vacate and they started thinking about this, the picture began to change.

Spotting the Moment in the Lease

The lease structure included annual tenant break options, and there were early signs that the occupier was reviewing its future property requirements. At the same time, the building itself was reaching the end of its useful life. The site, on the other hand, was well located and carried real potential for future redevelopment.

Simon Harper, Partner at Jaggard Macland, was advising the client at this point:

"The client didn't need to sell. The investment had done well for them over a long period and the income was strong. But the lease structure, the tenant's signals and the age of the building meant the risk profile was changing. If the tenant exercised a break and vacated, you're suddenly looking at no rental income, an empty rates liability and an uncertain planning process all at once. That's a very different position from the one the client was in. We felt the market would respond well to a property offering both secure short-term income as well as longer-term redevelopment potential, so our advice was to sell."

Preparing the Property for Sale

Rather than simply putting the property on the market, the team took a considered approach to maximising its appeal to the right buyers.

A planning appraisal was commissioned from PMV Planning Consultants to understand what the site could accommodate in future. Their conclusion was encouraging: there is in-principle policy support for higher density employment use, and they assessed the prospects for redevelopment as very good, with appropriate uses including light industrial, warehouse, offices and trade counter. Fletcher Crane Architects also prepared an indicative scheme showing how a terrace of three modern units could be delivered on the site.

With the planning context established, Jaggard Macland prepared a full marketing brochure and ran a targeted campaign to identify the right buyer. The sale completed successfully, with offers sought in excess of £2,800,000, reflecting a net initial yield of 8.05%.

What Happened Next

The value of the advice was underlined shortly after completion, when the tenant did indeed serve notice to vacate in May 2027. Had the client held on, they would have been facing exactly the scenario that had prompted the conversation in the first place.

Simon reflects, "That's the nature of commercial property. Circumstances can change quickly and often with relatively little warning. This is why we encourage landlords to review their assets regularly, not just when a lease event forces the issue. In this case, acting early meant the client was able to sell on their terms, with income in place and a compelling story to tell buyers. Waiting would have significantly narrowed their options."

What This Means for Landlords

Good commercial property portfolio management means a lot more than keeping properties let and the rent coming in. The managing agent should have a good understanding of where each asset sits in its lifecycle, what the risks look like over the next three to five years, and whether the current strategy still makes sense.

For this client, the answer was to sell. For others it might be to hold, to invest in improvements, to explore redevelopment, or to restructure a lease. The right answer depends entirely on the individual asset and the client's broader objectives.

If you own a commercial investment and haven't reviewed the strategy recently, it's worth having that conversation before circumstances make the decision for you.

Jaggard Macland advise on all aspects of commercial property, for both landlords and occupier businesses. We offer a free initial consultation, so feel free to get in touch.