2nd Floor, Imperial House, Kean Street WC2

Key Issues

• Building address changed from Kingsway to Covent Garden
• Risk of market slipping during negotiations
• Tenant was seeking compensation for disruptive building work
• Aging Specification
• Tenant had basement storage on an expired license

What We Did

• Allsop represented the Landlord of this multi-let building and managed a series of lease events of sitting tenants alongside a major refurbishment of the vacant floors and repositioning of the reception and entrance from Kingsway to Kean Street.
• We used the address change to introduce Covent Garden evidence to the negotiations.
• The tenant was seeking compensation for disruption to their quiet enjoyment as part of a settlement.  There was a risk that fudged deal could erode the story of evidence in the building risking weaker future deals.  To protect the evidence we separated the issues and made a separate payment for compensation.
• The specification was 10 years old, however we were able to demonstrate that there should be no discount.  We showed that the premises were in disrepair and that replacement of the Cat II lights with LEDs would be the tenant’s chosen method of repair (cheapest medium term option) and that much of the rest of the poor presentation of the floor would be rectified if the tenant complied with their decorating covenants.  The air-conditioning plant was shared with the other of the tenants so was directly comparable for all floors.
• Evidence outside the building was showing headline rents of £60 psf with lengthening rent free periods.  The valuation date for a renewal is the Court date, in a declining market it is invariably in the tenant’s interest to delay matters.
• To expedite negotiations we used the threat of ending a tenancy-at-will arrangement on the tenant’s basement storage space.  The possibility that this might end was an ever present reminder to the tenant to remain engaged with us on the renewal process.

The Outcome

• The renewal was agreed at very satisfactory £51 psf with a separate co-terminus license put in place for the basement storage.