Denholm Oilfield Services

We were approached by our client, Denholm Oilfield Services, to assist following their relocation from their property which had a passing rent of £324,520 per annum and an unexpired lease term of approximately two years.

Short unexpired lease terms can be problematic to the market and the strategy adopted was to offer the property for new lease with the involvement of the Landlord.

A new lease was entered into between the existing Landlord and new Tenant, Control Valve Solutions Ltd.  The Landlord was Standard Life Investments UK Real Estate Fund, which resulted in the early termination of the existing lease with over a year in advance of its natural expiry date and a consequent savings of rent and rates were realised.

With a passing rent of £234,520 per annum and a Rateable Value of £271,000 our Client required assistance in terms of negotiation and lease agreement.

The project involved multi-disciplinary input from our Agency, Building Surveying and Rating teams and required tripartite negotiations to be conducted with the existing Landlord, prospective new Tenant and our Client.

Approach

Early engagement with the Landlord and any prospective new Tenants were the first steps from our Aberdeen Agency team, with negotiation and agreement of tripartite Heads of Terms following shortly after.

Commercial Terms were agreed between the existing Tenant and the Landlord, which enabled the Landlord to enter into a new lease with the new Tenant easily and within a timely manner.

The Building Surveying team addressed the Terminal Dilapidations liability and agreed the dilapidations settlement with the new Tenant upon approval from the Landlord.

Key Challenges

There was a requirement for tripartite negotiations to be conducted involving agreement on incentives and new lease terms between all parties involved.

Results

Despite the complexities and multiple parties involved the timeline was maintained and a satisfactory outcome was achieved on behalf of all parties.

As a consequence of our involvement in this Project, the clients realised savings of almost £1Million and were able to terminate the liability for the lease over a year in advance of natural lease expiry date.

Key Message

Active involvement with all parties was maintained throughout the Project, resulting in timeous outcome and resultant significant savings to the Client.