We were appointed by KBC to inspect their head office and prepare a dilapidations assessment report for budgetary and strategy purposes during the last few years of their 15 year FRI lease. The headquarter office building was constructed in circa 2001 and provides circa 20,000 square feet.
The situation was complicated in so far that there were sub-tenants in place, with lease expiry dates approximately 1 month prior to the head lease expiry and these sub-leases had Schedules of Condition attached to them.
The property had recently changed freehold ownership and Planning Permission was in place for a residential conversion.
Our client was considering a variety of options at the point of lease expiry including relocation as well as taking an internal FRI lease on one floor at the property.
HOW PROPITAS ADDED VALUE
We liaised closely with our client at an early stage, in order to understand what their key objectives for the property were, post current lease expiry.
We then reviewed the leases, inspected the offices and prepared a hypothetical assessment of the potential dilapidations liability. This was complicated by the potential S.18 supercession defence relating to the change of use planning permission. Ultimately, the new landlord decided not to implement the residential conversion consent and extended the use of the property as offices for a further new lease term, including new leases direct to a number of former sub-tenants.
Our close liaison and open approach to the dilapidations meant we agreed the works and submitted approximate costings to our client in order for them to ascertain the value of work required against the new lease options. We then negotiated with the new landlord in order to reach a reasonable dilapidations settlement with regard to the former head lease in order that a new internal repairing lease could be agreed by our client on a smaller portion of the building.
• Preparation of a dilapidations assessment summary report.
• Careful review of various leases and sub-lease documentation to prepare detailed cost estimates.
• Commercially focused negotiation to achieve the most cost effective dilapidations settlement for our client and continued occupation of one floor.