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  6. Rent Review: 30 Old Bailey, London EC4

30 Old Bailey, London EC4


Key Issues

  •  Best in class office building
  • Rent roll in excess of £11M
  • Assessing value during the chaos of the early days of covid Photo
  • Market sentiment versus letting activity

 

The Case

Concerned the first rent review on a best-in-class City core office building opposite the Old Bailey criminal courts. A prominent building with distinctive elevations on an island site with 360 fenestration.

How to value a five-year-old office building presenting as ‘good as new’.

Negotiating off a minimum uplift rental of £61.50 per sqft.

Appropriate fitting out periods that reflect lock down and social distancing restrictions

 

What We Did

The lockdown had a devastating effect on the office market in the early months of covid, not least caused by the prohibition on viewings.  With a rent review date of 27th April 2020, the case looked ever more challenging when the government announced a minimum lockdown period extension until 7th May 2020.

The landlord case was based on evidence that deals completed in Q2 2020 were showing no sign of rent softening.

The backbone to our negotiations was:

  • Deal evidence was close to zero with deal activity during Q2 2020 at less than 1/3rd of the long-term average
  • To rely upon evidence of deals aborted / placed on hold in Q2 as prima facie evidence of market conditions at the valuation date – the date that the hypothetical tenant was agreeing terms
  • To minimise the weight of evidence on deals done in Q2 on the grounds that momentum took these transactions ‘over the line’

A collation of evidence demonstrated that the landlords were conceding an additional three months on rent frees to complete deals in 2020.


The Outcome

The rent review was settled at a minimal 0.5% increase above the collar rent.

The increase attributed solely to the values on the top two floors which benefitted from exceptional views and a terrace.

Allsop's razor sharp knowledge of the city core deal activity was critical - having details of every transaction occurring post 23rd March 2020.

Property Occupier Services

We cover central London and Fringe offices, we also cover the south east market in both offices and industrial and consider rent rolls from about £75,000 p.a. upwards.

We can provide a free appraisal of your rate bill, and advise on the most efficient and least risky course of action.

If your lease is coming to an end? Do you have a break option or want to re-negotiate your lease?

We can help negotiate any “exit costs” to the tenant of putting a property back into repair and potentially reinstating tenant’s alterations at the termination of a tenancy / lease.