Unit T Lyon Way, Hertfordshire
As this was effectively a sale and leaseback, we advised the client that there was a strong possibility the tenant would break their lease at the end of the third year. On the acquisition, the price paid reflected not only this but further thought was given on what potential works would be required to make the unit suitable to a new potential occupier since it had been fitted out extensively as offices in the warehouse area (circa 70%).
In 2021, the break was instigated and in the first instance we instructed our building surveyors to commence the dilapidations negotiations with the tenant. We worked with the landlord to identify a schedule of works that were required in order to appeal to potential occupiers and the rental level and likely terms that could accordingly be achieved. Having this in place and scheduled we were able to commence marketing before the lease end date. Whilst we had a plan of the layout as it would be once all the offices were removed from the warehouse area as well as the specification of the building, potential occupiers were not able to see the space they would be using.
The result was that we were unable to secure a tenant before the lease end but as works could be scheduled for the day after the building was vacant, the partitions were removed very quickly. Even though works were continuing to be undertaken, the now open warehouse area allowed occupiers to assess the space for their needs and very quickly we received two offers subsequently negotiated to full asking rent. We advised the client that one potential occupier in particular was more attractive due to their covenant strength and with some improvement on terms their offer was accepted.
Terms were agreed prior to all of the refurbishment works being completed and an agreement to lease entered into with lease commencing shortly thereafter. The client was delighted with the terms agreed with the new tenant. They were well advised in the acquisition process so that they could anticipate not only the likely lease end date but the implications this would have in terms of income and expenditure to complete the required works.
For further information on this property or to discuss a future property requirement, contact our Commercial Agency team on 01727 732212 or via email: email@example.com