JP Morgan Cazenove occupied 16,000 sq ft business recovery offices and date centre space on the 3rd floor at 1 Exchange Tower, E14 in London’s Docklands. The 16 storey office tower at 1 & 2 Harbour Exchange was acquired by Hammerson in 1999 for £77m and subsequently sold onto MGPA Europe Fund III in September 2010 for £134.6m – an 8.1% yield. The building comprised 485,000 sq ft office space let to a range of tenants. The new landlord, MGP Harbour Exchange II S.a.r.l. sought to increase the annual rent payable under JPMC’s leases as at the 29th September 2009 review date, from £21.00 per sq ft to a highly optimistic headline rent of £32.50 per sq ft.
McCalmont-Woods was instructed by JP Morgan Cazenove to handle the upward only rent review negotiations on its behalf and mitigate any increase in rent payable from the review date.
- Consideration of existing lease contract and provisions for rent review
- Comprehensive research into, and analysis of, comparable market evidence in the Docklands offices sub-market at the valuation date
- Preparation of initial client report on rent review 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
Settlement was reached by negotiation between the parties at a revised rent of £22.00 per sq ft with McCalmont-Woods achieving almost £1 million rental savings for JP Morgan Cazenove over the 5 year term remaining on its two leases expiring in March 2015.