International SOS is the world’s leading health & security services company. More than 12,000 multi-cultural health security and logistics experts stand by to provide support and assistance from over 1,000 locations in 90 countries. The company takes around 4 million assistance calls every year and has close to two-thirds of the Fortune Global 500 companies as clients.



McCalmont-Woods was tasked with devising and implementing a break option strategy for International SOS on its London office HQ (comprising circa 44,000 sq ft) situated at Chiswick Park, W4 in West London and considered by many to be London’s premier office business park location.

Over a period of 8-months leading up to the date for service of the tenant’s break notice, a comprehensive review of the central London office market was undertaken during the midst of the global pandemic. This involved the analysis of 70 properties and after careful review and the physical inspection of 15 buildings, a shortlist of potential relocation options was drawn up. Requests for proposal were issued to various landlords with detailed heads of terms negotiations conducted on a select number of (‘the go’) options. In parallel with the relocation exercise, the opportunity to restructure the tenant’s existing office leases (‘the stay option’) on Chiswick Park was explored in detail with Revantage Europe (a Blackstone company) advising the tenant’s existing landlord CIC, the Chinese sovereign wealth fund.



The successful break option strategy devised by McCalmont-Woods resulted in International SOS remaining at Chiswick Park under restructured lease terms which produced circa £4 million savings for the business, reported to be “the most generous terms ever offered on a lease regear at Chiswick Park”.


Michael Whitlow, Human Resources Director, Assistance Business Line
“Thank you so much for delivering such an incredible outcome for the business. It has been a pleasure partnering with you on this critical project.”


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.

The successful lease disposal for the full 5-year term remaining generated significant cost savings of circa £3.25m (US $4m) for Apex despite the deal being delayed three months due to COVID-19.

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 film buff 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.


Apex Group Ltd., established in Bermuda in 2003, is a global financial services provider. With over 45 offices worldwide and 4000 employees, Apex delivers a broad range of solutions to asset managers, capital markets, private clients and family offices. Apex administers over $650 billion in assets globally. Sub-brands within the Apex Group include Throgmorton, LRI and European Depositary Bank.

Ipes was founded in 1998 specifically with Private Equity in mind and pioneered the Private Equity specialist approach to fund administration. Ipes is now part of Apex Group Ltd since 2018



When, in 2015, leading provider of fund administration and outsourcing for European private equity Ipes wanted to grow its headcount and achieve property cost savings it enlisted McCalmont-Woods to help relocate its London office from Victoria in the West End to the City of London where rental values were lower. The resultant acquisition of 8,100 sq ft on a new 10-year lease at 1 Minster Court, EC3 produced immediate cost savings of £750,000 for the business and enabled Ipes to cap its liability for service charge for five years.

When three years later in 2018 Silverfleet Capital realised its investment in Ipes, new business owner Apex Group Ltd (backed by Genstar Capital) resolved to further improve the business’s operational performance by amalgamating all functions into a single office site whereupon McCalmont-Woods was tasked with disposing of the now surplus lease on the 9th floor at 1 Minster Court, EC3.



The successful assignment in 2020 for the full 5-year term remaining under Apex’s lease, to leading UK insurer Direct Line Group, produced £3.25 million cost savings for Apex.


Mark Coppin, Operations Director, Ipes/Apex
“McCalmont-Woods’s flexible, approachable style and years of experience in its sector gave a great deal of confidence that we were getting the best deal available. Moving offices is a once in ten years project for us whereas McCalmont-Woods has been continually guiding clients through this process for as many years. Their pragmatism and knowledge were an essential part of ensuring everything happened smoothly and on budget.”


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.