[2023] UKUT 153 (LC)

The relocation property is a shop unit on the ground floor of Intu Watford. It is located at the northern end of the Centre, close to doors that mark the entry and egress point into what was Charter Place and is now the extension to The Atria. The relocation and reference properties were some 111.5 meters apart when following the pedestrian route through the mall and into Charter Place. The relocation property is situated on the western side of the mall between Marks and Spencer and the former BHS. Other nearby retailers include L’Occitane and Trespass. The BHS store was subsequently divided between The Entertainer, Deichmann and Flannels although the latter store only has frontage to the High Street. At the time of the relocation Next occupied a large unit on two floors opposite the relocation property but have now moved to a significantly larger store in the Atria extension.

The relocation property itself is arranged over ground and mezzanine levels. It has an overall frontage of 9.35 metres and is 7.24 metres deep. A common lobby is located at the left hand rear of the unit, together with a staircase to the mezzanine level. Taken as one, these elements measure approximately 4.7 metres by 2.8 metres and mean that the depth of the sales area is reduced to about 4.45 metres across about 50% of its width. The left-hand side is further encumbered by reduced headroom caused by the presence of the mezzanine floor. The claimants have used part of this lower headroom space to create an office and have utilised the understairs area for storage. The mezzanine floor contains a kitchen and staffroom, a toilet and a cupboard.

During our inspection we noted that the floor surface of the mall outside the property slopes with the level being some 200 mm lower at the southern end in comparison with the northern. The floor levels in the unit have been adjusted to cope with this disparity, notably with a step concealed in the window display. We also noticed that the floor in the unit slopes away downwards from the frontage.

Internally the floor has a polished stone tiled finish to the public areas and a granolithic surface elsewhere. The walls are either panelled or plastered. The ceilings are mostly finished with a plaster skim and have recessed lighting. The ground floor is equipped with air conditioning cassettes fed from a landlord provided central infrastructure. Mr Lightowler commented that the shopfit was amongst the most difficult that Warren James had encountered, partly because Intu had insisted on certain features including bespoke 13.5 mm glass in the shop front.

The claimant occupied the relocation property on a lease with a 10 year term from 20 June 2016. The lease was effectively on full repairing and insuring terms and was not contracted out of Part II of the Landlord and Tenant Act 1954. It contained a break clause in favour of the tenant in year 5 of the term but should the tenant activate the clause a penalty of £25,000 would be incurred. The rent comprised a basic rent and a turnover addition, this latter element became payable when 7% of the gross turnover exceeded the basic rent. The first 6 months were rent free. The occupational costs for the year ending 31 March 2018, that is the first full year of occupation, were as follows: