Often farms or land are offered on the market with telecommunications equipment, typically masts erected by mobile phone operators. Other equipment may include underground fibre optic cables, or fibre optic cables on electricity pylons, which attract an annual rent or termed wayleave payment.
The question is how do you value this equipment? The new Electronic Communications Code took effect on 28th December 2017 providing a revised legal framework for new (including renewed) agreements for the installation and operation of apparatus for electronic communication networks. Following the introduction of the new Code, valuing telecommunications equipment has become more difficult. The Code has substantially increased powers available to telecommunications operators to the extent they could now be considered as a statutory provider, in the same way as your local water company.
The new Code provides wide ranging changes, with the most significant being rents where, for example, on a mobile phone mast site, this will be based on the market value of the site, which may only be a matter of £200-£300 per annum, rather than the £5,000-£6,000 currently achieved.
Another example of new powers is that the operator now has the freedom to assign the lease to another Code operator, without Landlord consent and also the right to site share with another Code operator without any pay away to the Landlord. What is certain is that Code operators have seized the opportunity to reduce their costs to the detriment of the landowner. There is now a sense the market has stalled, with landowners, unsurprisingly, not wishing to enter into new leases at considerably reduced terms.
This clearly has implications on the value of the site and therefore the value of the asset being sold. It is early days in the interpretation of the new Code and obtaining the right advice is imperative to ensure you maximise the value of your asset or, indeed, rent in the event of a lease renewal.
Kivells have a dedicated team of rural professionals, supported by experienced administrative staff, who deliver a wide range of professional services. Our team is strategically positioned geographically to cover the Westcountry with offices in Exeter, Holsworthy, Liskeard and Launceston. Contact your local office today www.kivells.com.
Mark Bunt Director, Liskeard Office