Objective

Porta Wealth Management LLP, a new company established in early 2014, wished to open an office in the City of London and after due consideration as to the merits of entering into a licence agreement on serviced offices, elected instead to acquire a new 5-year lease on premises.

Being a new start-up it was important to project the right image to clients and staff while at the same time exercising control on operating and capex costs. Equally important was the need to retain lease flexibility to reflect the businesses’ future growth pattern and hence it was decided that the new lease should incorporate an option to determine in the third year of the term.

Services provided

McCalmont-Woods sourced and supplied details of a longlist of property options within a 800-1,200 sq ft size range for Porta to consider and then organised for the LLP members to inspect the options shortlisted after which detailed cash-flows were prepared to highlight the cost profile of each selected property under consideration.

Once a preferred building had been identified, heads of terms were quickly prepared and agreed. Reflecting the scarcity in availability of good quality small suites in the City, the parties entered into a four week exclusivity period in which to negotiate and conclude the lease contract. The whole process from initial to contact to agreement of HoTs took four weeks.

Result

On Porta’s behalf, McCalmont-Woods acquired approximately 900 sq ft Grade A offices in a newly refurbished mutli-let building located in the heart of the City on a new 5-year lease direct from the building owner and incorporating a 3^rd year tenant break option. A competitive rent and tenant incentive package was agreed enabling Porta to manage its cost base over the lease term in accordance with its business plan.

Objective

Dominion Corporate Services Limited wished to exit its offices in 23 College Hill, EC4 and so in March 2013 appointed McCalmont-Woods to manage the disposal of its 6th floor lease which still had 5 years to run to March 2018, subject to a 3 year tenant’s break option. The £55.00 per sq ft rent passing was subject to a rent review in April 2013.

Services Provided

McCalmont-Woods devised and implemented a marketing campaign aimed at occupiers interested in the opportunity to benefit from the flexible lease term available and also the potential significant capex savings that would result from being able to re-use Dominion’s existing high quality office fit-out. In addition McCalmont-Woods formulated a strategy for negotiating the upward only rent review against Dominion’s immediate landlord in order that the outstanding lease event would not impinge on Dominion’s ability to dispose of its surplus lease.

Result

McCalmont-Woods succeeded in identifying a US based investment bank to take an assignment of Dominion’s lease within four weeks from commencement of formal marketing.

Client Benefit

Dominion achieved c.80% lease cost savings and was also able to recoup seven months rent deposit on completion of the lease assignment.

Objective

Leading specialist liability insurance provider Marketform identified the need to relocate from its existing premises in Lime Street, EC3 to larger, higher-specification premises to support the burgeoning needs of the business.

Marketform’s objective was to occupy a single floor of 12-15,000 sq ft within the ‘Lloyds Triangle’. The premises needed to be of a regular configuration and capable of accommodating a minimum of 50 staff, with provision for 25% headcount expansion over the next 4-5 years.

Services Provided

A realistic budget was determined and after an extensive market search, a larger, self-contained building providing 20,000 sq ft was identified as a potential suitable option. Nick established that the building’s owner, Capital & Counties plc, wanted to sell its freehold interest in the property and that in order to maximise investment value, it needed first to secure a letting. This provided the opportunity for Nick to leverage a highly favourable transaction for Marketform.

Result

Nick was able to negotiate a new 10-year lease on the property at a low initial rent that would rise each year up to the rent review in five years time. Also at this time the tenant would benefit from an option to determine the lease. In the event that the tenant elected to retain occupancy, no rent would be payable in year six — effectively allowing Marketform to benefit from an 80% gearing after the reviewed rent had been determined.

The ground floor was sub-let on a short-term lease to reduce Marketform’s exposure to property costs while affording the future flexibility needed to expand its operations in the building.