Rothschild Spends £18m to Break Long Term Lease in the City of London
Rothschild vacated the business centre at
One King William Street, EC4, in January after moving across the road to a new headquarters on St Swithin’s Lane. However, the lease and tenancy agreement was fixed until 2023, with an opportunity to break the contract only set to arise in 2018.
This meant that although Rothschild was no longer a tenant, they were committed to paying a rental rate of £4.5million a year for another 6 years. Furthermore, the investment bank would also face large scale renovation bills for the soon-to-be dilapidated Grade II listed building.
Because of these rates and impending refurbishment, Rothschild decided to approach their landlord and ‘opt-out’ of the long term lease with a £18m pay-out. The Times reports that Rothschild felt this was a “sensible figure to surrender the lease early”.One King William Street has now been bought by Asia’s largest telecoms corporation, NTT, for a reported £67million. In a show of confidence for the future of office space demand in the City of London, NTT has already appointed building contractors to carry out the necessary renovations.
However, this story highlights the pitfalls and risks associated with long term lease agreements. If your companies is looking to rent office space in the City of London, Search Office Space can help negotiate short-term, flexible contracts with landlords, which will ensure you get the best deal possible, and have the option to relocate, increase or decrease your office space environment at short notice.
For more information about short-term, flexible contracts, talk to Search Office Space today on 0800 524 4649 to discuss your requirements.