JP Morgan Cazenove occupies c. 16,000 sq ft on the 3rd floor of 1 Exchange Tower, E14 under two separate leases expiring in March 2015.
The 16 storey office tower at 1&2 Harbour Exchange was originally acquired by Hammerson in 1999 for £77m but was then sold in September 2010 to MGPA Europe Fund III for c. £134.6m – an 8.1% yield. The building comprises 485,000 sq ft of office space let to a range of tenants.
The new landlord, MGP Harbour Exchange II S.a.r.l. sought an increase in the annual rent passing at review from the existing £21.00 per sq ft office rent to a new rent based on a highly optimistic £32.50 per sq ft headline rent.



McCalmont-Woods was instructed by JP Morgan Cazenove to negotiate the upward only rent review and mitigate any increase in rent payable as at the 29th September 2009 review date.


Services provided

  • Consideration of existing lease contract and provisions for rent review
  • Comprehensive research into, and analysis of, comparable evidence in the Docklands offices sub-market as at the valuation date
  • Preparation of initial report to client outlining McCalmont-Woods’ recommended strategy
  • Negotiations with landlord’s agent to include submission of a ‘Calderbank’ offer
  • Preparation of Statement of Agreed Facts and Statement of Agreed Evidence as a prelude to a full Arbitration



McCalmont-Woods negotiated a saving for JP Morgan Cazenove on the increase proposed by the landlord, equivalent to almost £1m in rent over the 5 year lease term remaining.


Leading specialist liability insurance provider Marketform identified the need to relocate from its existing premises in Lime Street, EC3 to larger, higher-specification premises to support the burgeoning needs of the business.

Marketform’s objective was to occupy a single floor of 12-15,000 sq ft within the ‘Lloyds Triangle’. The premises needed to be of a regular configuration and capable of accommodating a minimum of 50 staff, with provision for 25% headcount expansion over the next 4-5 years.


Services Provided

A realistic budget was determined and after an extensive market search, a larger, self-contained building providing 20,000 sq ft was identified as a potential suitable option. Nick established that the building’s owner, Capital & Counties plc, wanted to sell its freehold interest in the property and that in order to maximise investment value, it needed first to secure a letting. This provided the opportunity for Nick to leverage a highly favourable transaction for Marketform.



Nick was able to negotiate a new 10-year lease on the property at a low initial rent that would rise each year up to the rent review in five years time. Also at this time the tenant would benefit from an option to determine the lease. In the event that the tenant elected to retain occupancy, no rent would be payable in year six — effectively allowing Marketform to benefit from an 80% gearing after the reviewed rent had been determined.

The ground floor was sub-let on a short-term lease to reduce Marketform’s exposure to property costs while affording the future flexibility needed to expand its operations in the building.