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Getting smart:
how 5G can enhance a
commercial property

Getting smart: how 5G can enhance a commercial property

Published: 11th February 2019
Area: Real Estate & Planning
Author: James Fownes

With the West Midlands recently being announced as a ‘testbed’ for 5G networks in the UK, it won’t be long until the technology rolls out nationwide, expected by the end of 2020. While most commonly associated with faster internet speeds, the new networks also have the potential to improve other efficiencies, security and even wellbeing.

5G has been sold to the public as a ‘game changing’ technological development, offering 10 to 20 times faster download speeds than 4G. If this becomes a widespread reality then in the long term this could have a significant impact across a range of industries, from assisting in the processes of autonomous cars to enabling on-the-move paramedics to give specialist guidance through video streaming.

Full connectivity

Connectivity is of paramount importance to business tenants, meaning that 5G will certainly be an attractive prospect for landlords in the commercial property sector to offer. With the enhanced networks, commercial properties could have access to a range of helpful connected devices, including connected light bulbs with the ability to transmit data (Li-Fi), HVAC systems and even entire building management systems. In fact, WiredScore, a connectivity rating provider, expects that more than one in three connected devices used in smart cities over the next year will be for business-related purposes.

The rise in remote working from home means landlords must work to provide welcoming spaces with superior digital infrastructure, to entice tenants back into the office space. By getting ahead of the curve and acting now to invest in 5G tech, fast-thinking landlords may also be able to increase the value of their newly ‘smart’ properties in future.

However, this doesn’t mean there won’t be any challenges to be overcome, particularly regarding infrastructure. 5G’s range is much shorter than 4G and is more susceptible to interference. It therefore requires the installation of transmitters and their associated infrastructure in densely populated areas.

The Electronic Communications Code

The new Electronics Communications Code, implemented at the end of 2017, saw changes made which has created a great deal of trepidation surrounding telecoms installations. This has led to some cases in which landlords have refused to allow the installation of 5G masts on their sites. However, this doesn’t necessarily put an end to the matter. In fact, the new Code allows operators to ask the courts/tribunals to impose an agreement to install communications apparatus, even without the landlord’s approval.

Managing a dispute

If a dispute does arise between a landlord and an operator, the landlord should seek advice from a telecoms law expert. There is very little case law precedent to offer further guidance as the Code has currently only been in place for a limited amount of time.

Many landlords don’t have the available resources to spend on interpreting their rights, presenting a real challenge when they’re approached by operators. With site rents expected to fall dramatically, landlords must ensure that they are fully informed before signing any agreements.

Lease agreements – clarity is key

If landlords do enter into a lease agreement, they should ensure that they are explicitly clear as to the length of term and any contractual termination provisions for the 5G apparatus. Landowners are required by the new Code to give 18 months’ notice to terminate an agreement, after which point operators have a 3-month window to serve a counter-notice opposing termination.

However, considering all of this, landlords need to carefully contemplate whether moving to 5G is right for them. If they are planning to keep leasing the property over the next 10 years, the opportunities 5G affords in terms of connectivity could well be worth the installations and investment, as long as the rent expected for housing the apparatus offers enough of an incentive. Alternatively, if they are already thinking of possible redevelopments to the property, such a commitment may be unwise.

Additional considerations should include the likely installation costs of private 5G infrastructure, aside from the masts themselves, such as transmitters, signal boosters and additional cabling, as well as the maintenance costs of these. One possible way of dealing with these costs is to include them in tenants’ service charges, potentially increasing them mid-lease depending on agreed terms.

Keep disruption to a minimum

When retrofitting a building with equipment such as this, it is essential that to keep in mind the rights of all current tenants. All landlords are under an express or implied obligation to allow tenants ‘quiet enjoyment’ of leased premises and in most cases they must demonstrate that they have taken any and all reasonable steps to minimise disturbance. Sensitivity and communication will be crucial throughout the installation process. For instance, they could attempt to ensure that all work is carried out after hours to minimise disruption, while still making all tenants aware to ensure that those working flexible hours are warned. If any disputes arise in relation to disturbance, these should be dealt with as quickly as possible by finding a mutually acceptable arrangement.

The benefits associated with 5G make for an exciting prospect, which will be particularly enticing for business tenants in commercial properties. However, landlords should be wary not to make any impulsive decisions which could have negative implications down the line. By approaching any new installations with care and consideration, both landlords and tenants can benefit without suffering from any excessive upheaval.

For more information please contact James Fownes or another member of the property litigation team.

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