Creative thinking gains substantial reverse premium for petrochemicals company

We were instructed by an old client, Serica Energy PLC, to find new London offices, as they had outgrown their existing premises and their lease was coming to an end. Quoting rents at the time were £42.50 psf and we identified 52 George Street, London W1, where Orange Telecom had vacated a building on which 3 years remained of a lease on 6,400 sq ft.

We agreed terms based on a rent of £30 psf plus a substantial rent free period and all dilapidations, which meant that our client received the sum of £925,000 + VAT as reverse premium.

What really attracted us to this property, apart from under-cutting the market rent by 25%, was the fact that the lease had a right of renewal so our client could, if they wished, benefit from 8 years of very low rent.

We received a monthly retainer and a performance related fee of £30,000 + VAT.

May 2010