We invite the leading lights of the property disputes world to tell us all about who they are and what they think. In this latest edition, we hear from Kathryn Sowter, a Director at Pelham Lease Advisory.
What does your average day look like – can you describe the variety of matters you might have to deal with?
I am lucky to be able to say that no day is ever the same. My time is generally split between being office based, meeting with clients and other surveyors, and being on site inspecting properties. It is the variety of providing advice, meeting interesting people and dealing with the tangible side of property that makes the area of surveying I work in so enjoyable.
Matters I deal with on a day-to-day basis range from lease advisory work such as rent reviews and lease renewals, valuation advice, and working with both landlords and occupiers to extract value by regearing leases.
What are the main skills needed to become a successful valuer/expert?
Attention to detail is key, together with the ability to support your opinion with evidence, presented in a logical and considered manner, both verbally and in writing.
It is easy to become convinced of your own case and forget that there are always important arguments to consider from the other side. Until you open yourself up to that, you cannot give good advice or come across as a balanced and convincing expert.
What's the most interesting property dispute you've been involved in?
I think it would have to be the Dukeminster v West End Investments (Cowell Group) case, where I was the landlord’s expert valuer. Whilst the case was essentially an undisputed lease renewal under the Landlord & Tenant Act 1954, there were many interesting elements to it, ranging from validity of notices, lease length and break options, and, of course, the annual rent. It is the only case I have been involved in where the judge rejected my opposing number’s approach to the rental valuation in its entirety.
How have you worked with Mishcon over the years?
I have worked closely with Mishcon on several other 1954 Act lease renewals, and sometimes against! I have also been instructed on other expert witness work, including a very interesting case acting as the tenant’s expert witness in connection with an application to modify a user restriction to allow use of period property in Mayfair as a private members’ club.
What impact has market uncertainty (as we've seen over the past three years with Brexit, COVID and the Ukraine war), had on your business and the disputes you have been involved in over that period, and why?
I have seen different sectors of the commercial property market experiencing different fates following the pandemic and the Ukraine war.
The industrial and logistics sector has witnessed very strong rental growth, fueled by unprecedented levels of demand and tight supply. I have experienced many landlords seeking to delay lease events to capture rental growth, albeit this growth has now slowed as the weaker consumer environment has reduced demand.
Despite the change in working patterns and the poor economic environment, the prime office sector has actually seen rents increase. There has been a “flight to quality” and to “green” properties, with rental growth occurring as a consequence of a lack of supply of prime space. This has been compounded further by fewer development starts owing to increased build costs and the rising cost of borrowing. It is, however, a very different story for secondary offices, where demand is weak. I have seen an increase in rent disputes, as valuing non-prime properties becomes more difficult due to a lack of directly comparable evidence.
The retail sector was already struggling pre Covid and with the cost of living crisis impacting household spending, rents have fallen. The new rates revaluation has, however, seen occupational costs reduced for the retail sector, which has provided a significant and much needed boost.
On a personal level, these market changes ensure a variety of interesting and challenging work for a lease advisory surveyor dealing with rent negotiations and litigation.