Published: 01/11/2016 By C. Elbourne
Commercial leases have generally been shortening over the last few years. This trend holds through not only for retail tenancies but for offices as well. The Lease Advisory team recently completed one such lease for a commercial lease renewal for an office in Kensington.
A tenant whose five-year lease was up for renewal in 2014 opted to agree to 2 one year leases over the next two years. Accordingly, in 2014 we agreed the shorter term to meet the tenant’s needs but negotiated for the tenant to pay the landlord’s legal fees and a rental uplift of 37% or £4,000 per annum over the old rent. At the end of that year we agreed a similar term for 2015 as the tenant remained uncertain about trading from this location in the long-term. We negotiated a further £4,000 per annum rent increase to compensate our client, the Landlord, for a shorter term and in line with market rent.
At the end of 2015 however, we negotiated for a longer lease to provide more income security for the client. A new five-year lease was agreed together with the omission of various onerous repairing liabilities for the Landlord from the original lease terms. A break option in year three was also agreed to facilitate any changes to the tenant’s corporate plans in the near term. Office rents in the locality also improved as evidenced by two recent office lettings of similar layout close-by. These supported our negotiations for a further rental uplift of £6,000 per annum.
In total we agreed a rental uplift of £14,000 per annum over the last two years for the client to compensate for the risks incurred in granting short term leases and accommodating the tenant’s short term need for flexibility.
Our commercial team provides lease advisory services which backed by an extensive database of rent comparables in West London. We are conversant in all Landlord and Tenant services including;
lease renewal,
rent reviews,
lease re-gears, subletting,
lease assignment lease surrender advice,
With an active commercial agency team and our Commercial management services we have a growing database of rental comparables to support our valuations which gives us a competitive edge when negotiating terms.
If you need help or have questions about any lease transactions, we will be happy to talk you through the process and advise on how our team can assist you.
Cherelyn Elbourne, MRICS Commercial Management Surveyor