Spanning approximately 110,000 sq. ft. and constituting one of the largest office buildings in Southampton, Old Mutual House is managed by APAM on behalf of a pension fund client.
Vail Williams’ lease advisory team inspected the building and carried out extensive research of the regional rental market, to provide the client with informed rent review advice.
The proposal detailed several potential options for consideration and recommended pursuing a rental increase in line with improving market conditions.
It also outlined a number of additional strategic options for consideration by the client, with the potential to add value to the asset over the short to medium term.
Over a period of several months, a rent increase was negotiated with the tenant’s surveyor and, despite uncertain market conditions and constraints imposed by the lease, an uplift in rent was agreed.
The outlook for the property market had become more uncertain as the effects of Brexit began to take hold, creating a challenging market in which to negotiate.
Added to this, was a significant shortage of evidence to inform the rental justification, which was comparable both in terms of quality and scale.
It was therefore vital that we undertook extensive research of the rental market both for Southampton city centre and the wider region. Our in-depth knowledge of the Solent region and extensive transactional database, assisted in obtaining an increase in rent despite the challenging market conditions we faced.
Adding complexity to the matter was the fact that the length of the assumed term was considerably longer than the market average.
However, by working together with the client and the tenant’s agent, we were able to successfully negotiate terms over the course of several months.
As a result of the advice provided by Vail Williams and the in-depth negotiations that took place with the tenant’s agent, we secured a positive outcome in spite of the challenging market conditions, maximising income and capital value for our client over the remaining term of the lease.
“We are grateful to the team at Vail Williams for their advice in connection with this matter. Not only did the team consider our immediate concerns, they also took the time to consider our future strategic property requirements. Such negotiations aren’t easy, but thanks to their in-depth knowledge of the Solent property market, Vail Williams was able to secure a positive outcome for us.”
Alex Hardwick, Senior Asset Manager, APAM Asset Management.
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