Cooke, Young & Keidan LLP is a leading boutique firm of commercial disputes lawyers. CYK specialise in undertaking substantial English Court litigation, international arbitration and alternative dispute resolution, working for businesses in the UK and abroad as well as for high-net-worth individuals.
Faced with a lease expiry in twelve months’ time in a building earmarked for redevelopment and in obvious managed decline by the landlord, CYK turned to MWRE for assistance in acquiring new office premises in the City of London. The brief was to acquire offices that would be of a much higher quality, and more efficient to occupy than existing, while also providing CYK with room to accommodate future growth.
Since CYK wished initially to consider relocation options across a wide geographical area, MWRE formulated a relocation plan and timetable which enabled CYK to consider the merits of circa 50 available properties before a shortlist of potential options was eventually decided upon.
Pre-acquisition due diligence surveys carried out at the partnerships’ initial first-choice option revealed that the existing M&E services were unable to meet the specification brief. Consequently, focus moved quickly to a consideration of various other potential options that were also available within the agreed timeframe.
MWRE successfully negotiated for CYK to acquire 11,000 sq ft newly refurbished Grade A offices at 21 Lombard Street, EC3 within the relocation timetable agreed, and underlining the importance of identifying at the outset, one or more suitable alternative Plan-B options as part of the risk management strategy to be employed during the relocation process.
CYK’s new premises enjoy natural light to all elevations and following a high-quality fit-out, provide CYK with prestigious modern offices including extensive meeting room space and a roof terrace, arranged on a efficient single floor in the heart of the City.
Neon Underwriting (previously Marketform) is a vibrant insurer operating in the specialist Lloyd’s market and is a member of Great American Insurance Group (GAIG), the insurance operations of American Financial Group, Inc. (NYSE:AFG). AFG has approximately US$60 billion in assets.
Neon occupied an historic Grade II listed 20,000 sq ft self-contained building on the fringe of the City’s insurance district. An impending lease expiry provided the option for Neon to either remain in occupation of its existing premises under new and improved terms (the ‘stay-option’) or alternatively the business could seize the opportunity to relocate (the ‘go-option’) to more efficient premises on a single floor and in a more modern building closer to Lloyd’s of London.
Following a thorough investigation of available properties, a preferred building (and back-up option) was selected for detailed financial review and benchmarking. Comprehensive building and M&E surveys were commissioned as part of the pre-acquisition due diligence undertaken by MWRE and associated project team members. This ensured that the building owners were required to carry out various remedial works to the property prior to lease grant.
MWRE successfully negotiated for Neon to take a new 10 year lease (maximising the level of incentive package available to the tenant) on a single floor of 29,500 sq ft at 20 Gracechurch Street, EC3.
Hartree Partners, LP is a global merchant commodities firm specialising in energy and its associated industries. Founded originally as Hess Energy Trading Company LLC (HETCO), Hartree’s business spans 10 offices around the world.
Hartree occupied 8,000 sq ft offices in a building earmarked for redevelopment in London’s West End. At lease expiry, the business faced the prospect of being forced to relocate to alternative premises in competition with all other tenants being similarly displaced, and in a market where the supply of office space was severely constrained. Hartree appointed MWRE after a previous property deal had fallen through at a late stage, leaving the business with a very tight timetable in which to find a new office space.
MWRE negotiated for Hartree to acquire a large single floor of 11,300 sq ft at Cardinal Place, 100 Victoria Street, SW1 under a new 10 year lease to maximise the level of tenant incentive package available to the business and a LTA 1954 protected lease provided security of tenure for the the business.
The 2,200 sq ft balance of space deemed surplus to Hartree’s immediate needs was sublet on short-term lease basis (to a strong covenant) which generated rental income and provided the business with expansion space to cater for future business growth.
Neptune Energy is an independent global E&P company founded by Sam Laidlaw. The Company is backed by CIC and funds advised by Carlyle Group and CVC Capital Partners. Neptune Energy employs 1,800 people working across exploration, appraisal, development and production and is active across the North Sea, North Africa and Asia Pacific.
Neptune Energy initially occupied a small 5-7 person serviced office in London’s West End and prior to its transformational acquisition of ENGIE’s E&P business (in February 2018), tasked MWRE with finding and negotiating the acquisition of a new London office into which the newly enlarged business could co-locate.
Working to a tight timetable, in a market where the limited supply pipeline was driving occupiers (particularly in the West End) to activate searches well in advance of lease events, MWRE evaluated over 50 property options across various London office sub-markets in order to reach a shortlist of potential building options.
A number of buildings were selected space planning/technical evaluation and detailed financial review before MWRE successfully completed negotiations to acquire 11,000 sq ft Grade A offices for Neptune Energy at Nova North, Victoria, SW1.
Orsted (previously known as DONG Energy) is a renewable energy company headquartered in Denmark employing 5,600 people including over 900 in the UK. Its shares are listed on Nasdaq Copenhagen and in 2017 the group’s revenue was DKK 59.5 bn (EUR 8.0 bn).
MWRE was tasked with developing a property strategy for DONG Energy which recognised that the business occupied some 50,000 sq ft under six leases in London from different landlords, all of which leases were due to expire within a short 2-3 year timeframe.
With headcount in London expected to grow significantly beyond existing lease expiry dates it was important to identify a new headquarters building that would be available to meet the businesses’ future growth needs within the timescale identified. In addition any new building would also be required to meet various exacting technical, environmental and sustainability requirements in keeping with the businesses’ corporate image and standards.
Against the backdrop of an increasingly tight London office market with low levels of supply and high levels of occupier demand, MWRE was successful in identifying and securing 81,000 sq ft Grade A offices in an award-winning building at 5 Howick Place, Victoria, SW1 for Orsted some 18 months ahead of lease expiry on highly competitive terms.
Tata Communications is a global provider of telecommunications solutions and services. The $2.9bn company which is headquartered in Mumbai and Singapore, has 8,500 employees across 38 countries and is part of the $103.3bn Tata Group. Its telecommunications network spans the globe and includes more than 500,000 km of subsea fibre and more than 210,000 km of terrestrial fibre.
Having helped Tata Communications (UK) Limited relocate its London operations from Docklands in to 18,600 sq ft offices in a more central City of London location previously, MWRE was re-appointed to acquire premises to serve as a new European HQ for Tata Communications. The catalyst for the move was Blackstone’s purchase of 20 Old Bailey, EC4 from Mitsui Fudosan, with its plans to extend and reposition the building which would require all of the existing occupiers, including Tata Communications, to vacate at lease expiry.
MWRE’s brief was to identify premises in the order of 15-20,000 sq ft which might be available on a maximum 5-year lease term, and in order to mitigate the cost of fitting-out any new offices (typically from a landlord’s standard Cat A finish) MWRE was tasked with identifying accommodation that had been pre-fitted and which could therefore be re-used and/or adapted to Tata Communication’s specific needs.
MWRE successfully negotiated for Tata Communications to acquire 16,600 sq ft fully fitted-out space at Vintners’ Place, 68 Upper Thames Street, EC4 on a new 4.5 year short-term sublease from Getco Europe Limited. Since Getco had themselves only occupied the premises for a very short period, Tata Communications were able to benefit from a virtually brand-new office fit-out which included structured cabling, comms room, kitchens, boardroom, private offices and meeting rooms and reception area. The offices were also taken fully furnished generating huge additional cost savings for the business.
“This is probably the best office we have in the whole world.” Vinod Kumar, Managing Director and CEO, Tata Communications.
Cazenove leased 100,000 sq ft close to the Bank of England in nine inter-connecting buildings that had been adapted to accommodate the ongoing needs of the business. To meet its growth expectations over the next decade, Cazenove sought to consolidate its operations into a single new building of around 155,000 sq ft, maximising the efficiency of the working environment for clients and staff.
In order to reach objective decisions to include a clear strategy for timetabling and implementation, Nick advised Cazenove’s partnership on:
- the timetable in which the Partnership needed to decide whether to ‘stay or go’
- the current and projected status of The City and Canary Wharf office markets with an assessment of how the supply and demand pipeline might affect rental value
- a cost benefit analysis of the Partnership continuing to invest in the infrastructure of its existing buildings
- the likely cost of terminal dilapidations and reinstatement to be borne by the Partnership on relocation
The decision was taken to relocate and Nick then managed:
- the formulation of a detailed occupational brief
- research into size, deliverability and timing of properties available for pre-letting
- arranging site inspections and presentations with potential landlord/developers
- generation of DCFs to illustrate total occupational costs over the projected lease term
- review of relevant investment considerations and impact on profit sharing arrangements
- the drafting and negotiation of heads of terms
By agreeing to accept a certain level of risk and cost and electing to relocate in what was then a relatively depressed City office market, Cazenove was able to acquire a new purpose-built headquarters building with a bespoke specification in a prime City location on extremely competitive rental and lease terms.
TATA Communications wished to relocate its London operations into 15-20,000 sq ft office premises situated in a more central location (than its existing Docklands office) for the least possible cost (operational and capex).
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.
Cable & Wireless sought to reduce its headcount by 2,700 in the UK by the end of June 2001, thereby releasing surplus offices for disposal. This included the disposal of its UK headquarters in 26 Red Lion Square, WC1 and its global headquarters in 124 Theobald’s Road, WC1. Property values in The City of London were at that time the highest across the entire London office market.
Nick managed and implemented the successful disposal of nine office buildings in central London, encompassing in excess of 300,000 sq ft and including both 26 Red Lion Square and 124 Theobalds Road. These disposals resulted in a more efficient use of premises within Cable & Wireless’s existing portfolio and allowed for the acquisition of a new 18,000 sq ft office in Paddington housing the Group executive to support the re-engineering of the overall business.
- Inspection of all relevant properties and supporting lease documents
- Preparation of initial high-level report outlining the likelihood and cost of disposal
- Production of bespoke marketing reports for each individual property containing a analysis of the best method of disposal, route to market and likely timetable to exit
- Marketing action plan comprising indicative strategy, budget and methodology
- Generation of DCFs to support the business case for disposal
The disposal of 42,000 sq ft in 26 Red Lion Square to The Economist Group helped release funds for the business at a time when they were most needed. Shortly thereafter, Cable & Wireless vacated 124 Theobald’s Road. Acting on Nick’s advice, the company embarked on a significant upgrade of its surplus accommodation with a view to seeking a single occupier for the whole building. Five months after completion of the upgrade, Nick let the entire building to MediaCom, a subsidiary of WPP.
The acquisition of 18,000 sq ft in The Point, Paddington Basin, W2 heralded a move away from Cable & Wireless’s historic Holborn location and provided the lynchpin for issuing a new policy directive requiring all new premises acquired be held on shorter-term leases.