Lease events are a catalyst for change

With businesses across the UK expecting to make significant changes to their ways of working, a forthcoming lease event provides an opportunity for many organisations to improve operational efficiencies and achieve significant cost savings, such that, any decision to remain in existing premises or relocate elsewhere has accelerated high up the corporate agenda.

As the ability to manage break options or lease expiries in an intelligent and timely manner can be a huge challenge, Nick McCalmont-Woods and fellow FIDES Network members Nick Dennis, Jenny Lancaster, Debra Spurway, Ian Griffiths and Lara Conaway have been considering the key drivers of change likely to influence corporate occupiers’ decision making.

To read more, please click Should I Stay or Should I Go Now?


How can we help? (
McCalmont-Woods Real Estate is a member of FIDES Network, a trusted independent network providing bespoke services and solutions for financial and professional services organisations, particularly during times of event-driven change.

Fides members are uniquely able to provide end-to-end services combining specialists in the fields of business strategy, operational excellence and transformation, technology solutions, commercial real estate, HR, office fit-out project management, workplace wellbeing and environmental assessments.


A mass repatriation of US tech firms unlikely, says SIOR Europe

Fears that recent tax proposals by US President, Joe Biden, could lead to an exodus of US tech firms from Europe have been overplayed, according to the European Chapter of global brokerage body, SIOR (The Society of Industrial & Office Realtors).

These proposals aim to discourage businesses from seeking out more benign tax jurisdictions and have raised the prospect of US tech firms abandoning European capitals.

However, should these reforms come to pass, they are likely to have a minimal impact on Europe’s prime office markets, say office specialists at SIOR Europe. “All major global businesses make their occupational decisions on a vast matrix of factors, of which prevailing corporation tax rates is just one. Factors such as access to local markets and to a wide talent pool are far more influential, along with a consideration of total occupation costs, including rent, rates and ancillary charges”, says Nick McCalmont-Woods of McCalmont Woods Real Estate in London.

“The big brand tech giants are truly global businesses. Their customers are spread throughout every corner of the world and they likely need an operational foothold in each of these regional markets”, he continues.

“In the aftermath of President’s Biden’s announcement, Ireland and Dublin inevitably came under the spotlight. However, I believe that the US administration is principally concerned with the repatriation of profits, rather than people. Without any significant reduction in headcount by the big tech players, the impact on the office market here should be minimal. The economic impact, though, would be serious”, says James Mulhall, tenant rep specialist with Murphy Mulhall in Dublin.

Charles Tatham of Tatham Property Solutions in Paris says “Corporate tax rates are generally falling throughout Europe and will be down to 25 % in France by 2022. Perhaps more significantly for France, other costs of doing business have also changed in a generally more business-friendly environment. Labour laws, where France still has a reputation of over-protection for workers, is no longer as justified.”

The rental data below from SIOR Europe also suggests that, regardless of the proposed imposition of a global rate of corporate taxation, most European cities have a competitive advantage in terms of rents and incentives. This means that any tech businesses relocating to the US from Europe will likely be faced with increased overall occupation costs.


About SIOR (
The Society of Industrial and Office Realtors ® (SIOR) is the leading society for industrial and office real estate professionals. Individuals who earn their SIOR designation adhere to the highest levels of accountability and ethical standards. Only the industry’s top professionals qualify for the SIOR designation. Today, there are more than 3,400 SIOR members in 686 cities in 42 countries.


The last 12 months have been transformative for businesses particularly across the office and retail sectors, forcing us all to work differently and think about how we want to work in the future. And, as various organisations adopt different workplace strategies, the question on everyone’s minds is how to effectively blend home and office working to create a hybrid model.

With 39% of businesses in the UK forecasting a reduction in office space and 66% of business leaders expecting to redesign office space to better suit hybrid working, now is the time to be thinking about how to successfully design and adopt a hybrid model.

McCalmont-Woods Real Estate has, together with fellow FIDES Network members PEN Partnership, CSL Integration and Fit Out Expert, been considering what a move to a hybrid working model means for corporate office occupiers and in particular:

* What are the trends in the UK and USA?
* What opportunities does a hybrid working model present and how do they compare with a more radical shift to a fully remote model?
* What are the key considerations and actions you need to take as you plan new ways of working and seek to improve productivity?
*How do you take a holistic view of future ways of working that aligns business strategy and operational excellence with real estate and technology?

If you’d like to understand more, please click Where and how we work has changed forever to read our views.

Earlier this year McCalmont-Woods helped a large international corporate to restructure its leases during the height of the pandemic on c.44,000 sq ft HQ offices at Chiswick Park business park in West London leading International SOS Human Resources Director Michael Whitlow to comment, “Nick McCalmont-Woods helped us to undertake a very successful review of our London real estate portfolio – as a result, we were able to negotiate very significant discounts with our landlord. Nick’s professionalism and client-centric approach made all of the difference.”

McCalmont-Woods Founding Partner Nick McCalmont-Woods said, “It is incredibly important for any business to be able to trust its consultants and in this respect, we have a proven track record of success in projects completed for corporate clients. We believe our specialist skills are vital, not only to corporate occupiers, but also private equity firms and portfolio companies seeking to enhance their performance and achieve optimal results, whilst staying agile and lean. By hiring in expertise on demand, companies can avoid substantial fixed costs precisely at the time when building back scale and value are strategic priorities.”


About FIDES Network (
FIDES Network is a trusted independent network providing bespoke services and solutions for financial and professional services organisations, particularly during times of event-driven change. FIDES Network Chairman Mike Symes said, “In a post-pandemic environment, businesses are looking for new solutions to recover, re-size and reimagine. At FIDES, we bring together brilliant people to deliver the most creative solutions.”

FIDES members are uniquely able to provide end-to-end services to business space users by combining specialists in the fields of business strategy, operational excellence and transformation, technology solutions, commercial real estate, the project management of office fit-outs, workplace wellbeing and environmental assessments.


Chiswick Park, the business campus located in West London, has announced that the world’s leading health and security services business, International SOS, has signed a reversionary lease in Building 4 to 2031. The 43,639 sq ft office is the company’s UK headquarters.

The lease renewal is testament to the culture and environment that Chiswick Park offers to its customers and demonstrates that leading businesses remain committed to securing the best office space for their staff to thrive in an environment that focuses on employee wellbeing and helps deliver corporate ESG agendas, despite the challenges posed by Covid-19.

Arnaud Vaissié, Co-founder, CEO & Chairman of International SOS, commented, ‘Our London office is critically important to us as our joint HQ and home to one of our 26 Assistance Centres. Since moving to the Chiswick Park site in 2012, we have been continually impressed with Enjoy-Work’s dedication to safety and sustainability. We are proud to make this long-term commitment to our people, our clients and to London.”

“We are delighted to continue to build on our long-term relationship with International SOS. This deal reinforces the appeal of a work environment that offers more than just an office, with plenty of outdoor space and onsite amenities available for workers. We are pleased that International SOS remains on our Campus to grow and develop further as a company “, said Matt Coulson, CEO Chiswick Park Enjoy-Work.

Chiswick Park covers 1.8 million sq ft of office space spread over 12 buildings. The Campus is home to some of the world’s leading companies including Pernod Ricard, IMG, Starbucks, Discovery and Danone.

The Park also houses over 45,000 sq ft of retail including a gym, restaurants, convenience stores and pop-up stores.

Onsite property management team, Enjoy-Work, is responsible for overseeing and performing the daily operations of the Campus as well as running a virtual programme of regular activities aiming to enhance the wellbeing and safety of its Guests.

Knight Frank acted for Chiswick Park and McCalmont-Woods Real Estate acted for International SOS.


About the International SOS Group of Companies
The International SOS Group of Companies is in the business of saving lives, protecting your global workforce from health and security threats. Wherever you are, we deliver customised health, security risk management and wellbeing solutions to fuel your growth and productivity. In the event of extreme weather, an epidemic or a security incident, we provide an immediate response providing peace of mind. Our innovative technology and medical and security expertise focus on prevention, offering real-time, actionable insights and on-the-ground quality delivery. We help protect your people, your organisation’s reputation, as well as support your compliance reporting needs. By partnering with us, organisations can fulfil their Duty of Care responsibilities, while empowering business resilience, continuity and sustainability.

Founded in 1985, the International SOS Group is trusted by 12,000 organisations, including the majority of the Fortune Global 500, as well as mid-size enterprises, governments, educational institutions and NGOs. 10,000 multicultural medical, security and logistics experts stand with you to provide support & assistance from over 1,000 locations in 85 countries, 24/7, 365 days.

To protect your workforce, we are at your fingertips:

About Chiswick Park Enjoy-Work
Chiswick Park is a 1.8 million sq ft business campus located in West London, W4. Developed in 1999 and designed by Rogers Stirk Harbour + Partners, it is today made up of 12 buildings, bringing together over 10,000 people from 75 of some of the world’s leading companies such as Discovery, Paramount Pictures, IMG, Starbucks and Pernod Ricard. Chiswick Park is set in 33 acres of landscape garden featuring a lake and waterfall. It also houses over 45,000 sq ft of retail space including an on-site Virgin Active gym, restaurants, convenience stores and a variety of pop-up traders and street-food vendors.

Chiswick Park is entirely managed by property management company, Enjoy-Work, which provides a range of services, facilities and entertainment for its guests on the park. The Enjoy-Work philosophy aims at providing an environment where people take pleasure at working and are therefore more productive in their work. In addition to building management, landscaping and maintenance, Enjoy-Work proposes a programme of regular activities and concierge services dedicated to the guests.


Prime rents unlikely to recover to pre-pandemic levels before 2022, says global membership body.

The abrupt decline in leasing activity in London’s office market has already translated into falling rents with the worst still to come, according to office specialists from the Society of Industrial & Office Realtors (SIOR). the leading global professional office and industrial real estate association.

A combination of stalled deals, increasing vacancy as tenants begin to offload suplus space and lease breaks has slowed leasing activity down to 1.2 million sq ft in Q2 2020, representing a 57% drop on the previous quarter, according to figures from DeVono Cresa.

Based on the same data from DeVono Cresa, this has already impacted rental levels with prime rents on Grade A space dipping by an average of 3% since Q1 2020. The biggest falls have been recorded in traditionally robust submarkets such as Mayfair (-8%) and Soho (-8%).

Paul Danks, Director at DeVono Cresa, and President-Elect of SIOR Europe, said: “As a result of the ongoing pandemic, we expect the lettings market l to remain subdued compared with historical levels mixed with increased appreciation for flexible office space. This will, in turn, lead to an increase in availability across central London. What we are seeing, and in a very short period of time, is a swing in the balance of power back towards the tenant.”

Though these figures are unsurprising, Nick McCalmont-Woods, CEO of McCalmont-Woods Real Estate, believes there is potentially worse news yet to come as the UK officially enters its first recession since the Global Financial Crisis (GFC).

“What we saw with the GFC of 2008/2009 was an initial softening of rents in the immediate aftermath of Leman Brothers’ downfall. Yet, as the economy contracted and the recession deepened, landlords were persuaded to offer far more competitive terms to attract a dwindling pool of occupiers”, he said.

The analysis [see table below] from McCalmont-Woods Real Estate shows that, though London’s prime office rents experienced a decline of between 9% and 21% over the first twelve months of the GFC, it took another twelve months for the market to reach bottom with prime rents having fallen between 16% and 39% from their peak at the end of 2007.

“As occupiers adjust to the impact of COVID-19 on their businesses and scale back, delay or even shelve some office requirements altogether, we expect the pattern of rental decline from the GFC to repeat itself and, if anything, it may be exacerbated further in the event that significantly more tenant/occupier controlled space is released back on to the market as businesses adopt new working practices in the longer-term.

Consequently, there is likely to be considerable uncertainty in the months ahead with rising unemployment, dwindling demand for space and an expectation that rents will tumble across the office sector. On that basis, we are unlikely to see the true impact of COVID-19 on rental levels before Q4 2021/Q1 2022 and cannot anticipate prime rents returning to 2019 levels any time before 2022, and possibly much later, if history is to repeat itself”, adds McCalmont-Woods.

Paul Danks, added: “While it would be unwise to bet against the long-term resilience of a market like London, there can be little doubt that we are going through a major period of re-adjustment. As occupiers’ understanding of the new working world improves and landlords’ responses to it evolve, we will all have to learn to live with a little more uncertainty”.


About SIOR (

The Society of Industrial and Office Realtors ® (SIOR) is the leading society for industrial and office real estate professionals. Individuals who earn their SIOR designation adhere to the highest levels of accountability and ethical standards. Only the industry’s top professionals qualify for the SIOR designation. Today, there are more than 3,400 SIOR members in 685 cities in 38 countries.


Global financial services provider Apex Group Ltd, advised by McCalmont-Woods Real Estate, has assigned its lease on 8,100 sq ft surplus offices at 1 Minster Court, EC3 in the City of London to leading UK insurer Direct Line Group.

Although the deal was delayed three months by COVID-19, the successful office lease disposal for the full 5-year term remaining generated significant cost savings in the order of £3.25m (US $4m) for Apex.

For film buffs, the landmark City building featured as the headquarters of Cruella DeVil’s fashion house ‘House of DeVil’ in Disney’s 101 Dalmations (1996) although surprisingly, the movie didn’t feature in Barry Norman’s 100 Greatest Films of All Time!


Apex Group Ltd., established in Bermuda in 2003, is a global financial services provider. With 45 offices worldwide and 4,000 employees, Apex delivers an extensive range of services to asset managers, capital markets, private clients and family offices.


Investors should remember that the value of an investment and the income received from it can go down as well as up, and that they may not get back the amount they invested. Sage advice for any investor.

You may think it odd then that commercial office leases in the UK still provide for the annual rent agreed at lease commencement to be subject to rent review on an ‘upward only’ basis.

Rent reviews became common in commercial property leases during the 1960s and 1970s as a mechanism for adjusting existing lease rents to current market levels. They were devised specifically to protect the value of landlords’ interests in an inflationary environment whilst enabling tenants to secure traditionally favoured long-term leases.

In the UK rent reviews typically occur once every five years and it is now unusual to come across office leases that provide for a longer review pattern. Upward only means that the rent paid by the tenant cannot reduce at review time, even if the open market rent at the relevant review date is deemed to be lower than the rent passing.

Whilst it is too early to forecast how the market will fare post the immediate crisis, all of the tenant representatives and brokers we have spoken with intuitively feel that rents will come under downward pressure. Only time will tell!

The British Property Federation (BPF), the trade association for UK landlords, noted that the traditional upward-only rent review remains dominant in the UK commercial property market and, indeed, is seen by some as a major contributor to the attractiveness of the UK market to commercial real estate investors. Consequently, there is little appetite to change the ‘status-quo’, but occupiers are likely to think differently if exposed in a falling market to over-rented premises which prove both expensive and difficult to dispose of.

Intended to improve transparency and fairness in the negotiation of commercial leases, the new RICS ‘Code for leasing business premises’ (1st edition, February 2020) was an opportunity missed to pivot away from the constraints of upward only rent reviews.

With businesses haemorrhaging cash and searching for ways to stem the bleeding, occupiers across the retail, leisure and F&B sectors are actively seeking relief through rental waivers and deferred payments. Certain flexible space market (FSM) providers are closing down centres and seeking CVA arrangements to protect and survive. And, as various well-known retail brands enter administration, the case for business rates relief to enable the high street to compete with online retail grows ever stronger.

The shortening of leases over the past two decades has represented a major structural shift in the commercial property market. Rarely these days will occupiers sign-up for 25-year leases unless they are entering into very large lettings (and pre-lettings) or acquiring premises requiring a high level of fitting-out capex.

The average office lease length in the UK today is now closer to 5-years, having come in from the average lease length of 6.8 years in 2014. The impact of IFRS 16 requiring tenants to bring all operating leases on balance sheet (by recognising a ‘right-of-use’ asset and corresponding lease liability) may have also influenced some occupiers’ decisions to enter into shorter lease terms post January 2019.

As businesses review their space and headcount requirements, the risk for owners and investors is that faced with an upward only rent review and a significant deficit between the rent paid and market value, tenants will vote with their feet, exercising lease breaks which may be coincidental with the rent review. In extremis, they could even default, leaving landlords with unwanted vacancies and possibly also significant rent arrears. Consequently, on new lease acquisitions it is to be expected that occupiers will gravitate towards those properties which offer more flexible lease terms, including enterprise spaces within the FSM sector, given the likely trade-off between pricing and lease flexibility.

With landlords facing billions of pounds in lost or deferred rents and expected to take another hit at the June rent quarter-day, there clearly needs to be a recognition of the problems faced by both owners and occupiers. It will be interesting to see whether the Covid-19 pandemic acts as a catalyst for change.

Since there has been little debate on the merits of incorporating upward and downward rent reviews in new lease agreements (maybe there are too many players with vested interests?) we asked our friends, Paul McDowell and Stuart Allison, to explain how rent reviews in Ireland and Australia work. Here’s what they had to say…

Paul R McDowell, Principal, Paul McDowell Ltd, Dublin:

“Up until January 2010, Ireland followed the UK practice of upward only reviews. However, these were banned by law following tenant lobbying pressure as a consequence of the 2008/9 economic crash. In reality, it has had little effect as rents in all sectors continued to increase following the historic lows of 2010. Some landlords now favour indexed rents at review with caps & collars. Obviously, future rent reviews will be more impacted as rents are destined to fall due to the current pandemic.

In terms of investment, it did create a marginal two-tier market between assets with pre or post January 2010 leases, but a move towards a pattern of shorter lease terms and 5-year breaks largely negated this difference. One now needs to make a more critical assessment of rental values when arriving at capital value decisions. However, such market reviews have had zero negative impact upon the large swathes of overseas investment flooding into the Irish market since 2010.”

Stuart Allison, CEO & Principal, ResolveXO, Melbourne & Sydney:

“Market rent reviews are becoming a less common feature in Australian commercial property leases with most landlords and tenants preferring to agree to annual increases across the term of the lease for certainty, typically 3% to 4% pa.

Rent reviews usually only occur in leases at the commencement of an option to extend the lease period but even then, both parties typically prefer to work out the terms of any renewal package in advance, with landlords preferring higher face rents, and tenants preferring to negotiate and receive more generous incentives.

This is a change on 20 years ago where upwards only (known as ratchet clauses locally) face rent reviews were commonplace. While rental growth has been consistent since, incentive packages have been on a roller coaster and this has driven both parties to work towards a process that allows for a closer outcome to market. We are even seeing clauses now that require the determining valuer to provide a determination on the rent and market incentive!”

We are keen to hear your views on any issues affecting corporate occupiers, and how businesses might adapt and evolve in the new normal. Please e-mail us with your thoughts.


When life returns to normal after Covid-19 has abated, the big question for many businesses will be “what does normal look like?” After analysing their business’s response to social distancing measures, for some corporates there is likely to be a realisation that they are renting more office space than they actually need. GoSpace AI Chief Partnership Officer Neil Usher notes that every company that has conducted a space utilisation study has consistently found that between 25-50% of desks are unused throughout a day.

Factor in the impact of the Minimum Energy Efficiency Standard (MEES) Regulations on older inefficient office properties, and we arrive at a scenario where occupiers are exiting sub-standard office stock and concentrating core business activities in the best and most efficient real estate. With a breaking down of perceived cultural resistance to remote working perhaps the next big question to ask is ‘where should those core activities be located?’

We are keen to hear your views on how businesses might adapt to the new normal. Please email us with your thoughts.

Thank you and, please be more careful than you think you should.


With businesses hurting across the UK and tenants looking for financial support during the coronavirus crisis, occupiers are advised to check the terms of their lease and any insurance policies held to establish if they have grounds for relief as the Chancellor Rishi Sunak set out the following package of temporary measures to support businesses:

• a Coronavirus Job Retention Scheme
• deferring VAT and Self-Assessment payments
• a Self-employment Income Support Scheme
• a Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
• a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
• small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
• grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
• the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
• a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
• the HMRC Time To Pay Scheme

The above measures are unlikely to offer much in the way of succor for the majority of corporates and all of the legal opinion we have studied is consistent in advising that (subject to certain exceptions) tenants are not entitled to: a) terminate leases because they choose to close their business or can no longer afford to pay rent (unless entitled to do so under the terms of an existing break option), b) withhold rent or pay a reduced amount due to cashflow problems and, c) cease paying business rates. Note, service charges are usually reserved as rent.

Our advice is that occupiers (and/or their tenant representatives) should actively engage with their landlords at the earliest opportunity to discuss the options available, as there are a range of other solutions which could potentially provide some relief during this period of disruption.


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