DLA Piper occupied 54,000 sq ft in Victoria Square House under five office leases expiring in December 2018, with tenant-only lease break clauses in December 2013. KWB was asked to consider alternative locations for offices in Birmingham city centre and appraise these against staying at Victoria Square House and re-gearing their leases.
Having considered the incentives being offered on vacant offices in Birmingham city centre and the value of long term certain income, KWB negotiated a substantial capital payment from the landlord of Victoria Square House, together with an additional rent-free period in return for DLA Piper removing their lease break options and extending their office leases until December 2022. KWB also moved their rent review, which was due in December 2013, out to December 2015 and at five-yearly intervals thereafter.
Nigel Tripp, Partner at KWB, Birmingham-based office property specialists, who acted on behalf of DLA Piper, said: “Occupiers need to be aware of the value of office lease break clauses because they’re not there simply so that someone can relocate – although initially they may have been set up for this reason, either due to uncertainty regarding the economy or because they potentially required an office relocation at that stage.
“What they represent in the current marketplace is an opportunity for a cost neutral office move or, more importantly, if the occupier is pleased with their current office space and it works well for their occupational needs, a real opportunity to negotiate a capital payment, rent-free period or a combination of the two in return for the tenant simply removing the break from their office lease.”
See how KWB can reduce your office costs for free
If you have an office lease break or lease expiry approaching within the next six months to two years, you need to act now to make savings on your occupational costs. We’ll reduce your office costs for free, because our fees are paid by the savings made.
Call Nigel Tripp on 0121 212 5981 or email firstname.lastname@example.org.