Telecoms landlords beware of network consolid

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Telecoms landlords beware of network consolidations

July 2012

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Landlords with telecoms equipment on their land or property are being urged to seek professional advice as two major networks begin consolidation of their sites.

T-Mobile (now Everything Everywhere Limited) and Orange announced their network merger in September 2010; however landlords are only now being approached by the two operators as they consolidate or decommission sites to reduce operating costs. 
 
Chris Hicks, head of telecoms at Fisher German, urges landlords to seek professional advice to counteract such requests and receive appropriate compensation for consolidations.  
 
He comments “Landlords should seek professional advice from an agent that can provide a free lease appraisal outlining strategies for negotiation. An experienced professional who deals with the operators can increase rental payments for greenfield sites to around £6,000 - £6,500 per annum with one off premium payments in the region of £2,000 - £3,000.
 
“If a site is decommissioned, the operator often leaves the telecoms equipment onsite to reduce costs. In such scenarios it is likely a one off payment of £5,000 - £10,000 can be achieved for the landlord if the operator leaves the equipment in situ. Landlords can also negotiate to be absolved from liability for future planning enforcement and ongoing liability for business rates.
 
“I would also warn that in addition to this consolidation, some landlords are being asked to consent to their current lease being assigned to Hutchison 3G UK Limited. Landlords should consider whether the agreement permits this and if not they should seek advice as to what can be achieved.”
 
Despite the changes, landlords should remain upbeat.  4G (4th Generation) licences will be auctioned by the Government in late 2012/early 2013.  Whilst additional masts are required to service the new technology, many existing installations will be upgraded. This can lead to increased rent and other opportunities. For the majority of landlords it will provide long term security following a period of market instability and uncertainty caused by recent network consolidation. 
 
For further information please contact Chris Hicks or Eve Angell on 01858 411202.

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