IBTimes had outgrown its existing 2,200 sq ft offices in Canary Wharf and needed to move to larger premises. Having originally let IBTimes its existing offices, McCalmont-Woods was tasked with the job of identifying new offices on the Canary Wharf estate for IBTimes to move into.
A comprehensive market research exercise was undertaken leading to McCalmont-Woods inviting landlords on a select number of buildings to submit RFPs for consideration. The initial long-list of building options was then reviewed against a set of key criteria agreed with IBTimes and subsequently reduced to a shortlist of preferred options. Detailed cash-flows were produced on each option to assist with overall cash-flow management including fitting-out; timetable for relocations and last but not least, the rent and tenant incentive package to be agreed.
McCalmont-Woods successfully negotiated the acquisition of 6,280 sq ft on a new 5 year lease for IBTimes UK on the part 34 floor at Citi’s 25 Canada Square.
The premises acquired provided fully-fitted accommodation for over 80 staff which IBTimes to keep its capex costs to a minimum at the same time as providing room for future business growth.
TATA Communications wished to relocate its London operations into 15-20,000 sq ft office premises situated in a more central location (than their existing Docklands offices) for the least cost possible (in terms of operational and capex costs).
A comprehensive market research exercise was undertaken by McCalmont-Woods leading to a shortlist of potential options being drawn up. Detailed cash-flows were then prepared on each building, leading to a preferred relocation option being selected with heads of terms agreed and Board approval obtained, all within four months from the date of appointment.
McCalmont-Woods successfully negotiated the acquisition of 18,685 sq ft offices for TATA Communications on a new sub-lease from Accenture at 20 Old Bailey, EC4 on extremely competitive terms. The premises identified benefited from a full office fit-out that included meeting rooms, comms room and kitchen facilities providing effective ‘plug & play’ offices with circa 160 desks and associated office furniture already in-situ and ready for immediate use.
TATA Communication’s HR Director, Fionnula Bentley said ‘The offices we finally settled on are fantastic value for money and provide an ideal environment for our employees.”
Abbey Offices was keen to expand its network of business centres across central London by opening a new prestigious facility located in the City core.
In June 2008 McCalmont-Woods identified and introduced 30 St.Mary Axe, EC3 to Abbey Business Centres Ltd where Swiss Re had taken the decision to release 17,000 sq ft of fitted-out space within the iconic ‘Gherkin’ building. The accommodation was situated on the 15th floor, the highest floor occupied by Swiss Re, with commanding views over the City of London and across to the West End and Canary Wharf.
Whereas Swiss Re had initially been seeking to let its surplus offices on a traditional lease at a quoting rent of £62.50 per sq ft, McCalmont-Woods was able to convince the swiss insurer to enter into an Operator Management Agreement with Abbey Offices instead and after twelve months exhaustive negotiations, Abbey opened its new City business centre in June 2009.
The innovative structure of the OMA required the creation of a detailed financial model allowing both parties to benchmark future operating success.
SunGard needed to consolidate its operations into a single new facility based in the capital’s financial district. Nick’s starting brief was to report on the state of the office market in The City and Canary Wharf and to investigate SunGard’s strategic options. The company operated from nine central London locations and also occupied premises in Paris, Frankfurt and Zurich. The optimal solution was the acquisition of a single new site of 84,000 sq ft in the heart of London’s financial district.
An initial strategy paper was prepared for SunGard that addressed:
- an overview of its central London portfolio
- the opportunities for the acquisition of new space within the determined timescale
- the disposition of existing leased space
- the restructuring of existing lease liabilities on its core property holdings
- provision of dilapidations and reinstatement advice
- advice on forthcoming lease events, e.g. rent reviews, that might impact upon the disposition of existing offices
Nick’s key strength in this exercise was his robust and informed understanding of the dynamics of the central London property market, specifically in relation SunGard’s requirement for lease flexibility matched to its financial needs. These included a recognition of the implications to the business of adopting both IFRS and US GAAP accounting standards, made more complex by a need to reflect in any transaction SunGard’s own internal lease levelling issues.
The acquisition strategy included:
- formulation of accommodation strategy and occupational brief
- research into size, suitability and timing of available premises in both The City and Canary Wharf
- arranging site inspections and presentations with potential landlords
- drafting of RFPs and generation of DCF appraisals to illustrate total occupational costs for each shortlisted option
- twin-track negotiation to leverage best market terms
- advice on building specification and impact on reinstatement at lease termination
- advice on future expansion and determination options
- advice on level of tenant incentives
- advice on turnkey solutions for fitting out the premises
- advice on drafting of alienation provisions
- drafting and negotiation of heads of terms
Working closely with SunGard’s representatives, principally the Group CFO and the Group Facilities Manager for SunGard Europe, Nick acquired a total of 84,000 sq ft offices from Citigroup in 25 Canada Square, Canary Wharf under four separate leases. This structure afforded SunGard the flexibility it required to draw down and exit space on pre-determined dates under rental and rent-free terms that were significantly more favourable than could be expected in the open market at the time.
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.
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.