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.
- 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.