Lease surrender in Basildon becomes landlord’s gain

A landlord client of Glenny’s was recently guided through a disposal of a tenant’s company to an established commercial business, which resulted in enhancing the rental income, securing a stronger tenant covenant and mitigating any reduction in dilapidations liability. Through careful negotiations, Glenny successfully agreed a nine-year lease with the new tenant via a surrender and regrant of a new lease -- securing a guarantor with a considerable covenant strength. Christopher Elliot, Senior Surveyor at Glenny, said: ‘Our client was initially concerned to learn that the largest tenant on its industrial estate in Basildon was looking to sell its business. However, the lease surrender and regrant offered a significant opportunity. "We were able to enhance the level of rental income and secure a tenant with an even stronger financial standing, improving the overall investment value of the estate and protecting our client against a potential loss in a dilapidations claim.” Paul Aylott, Head of Valuation & Lease Advisory at Glenny, said: “These negotiations demonstrate the Lease Advisory team’s capabilities to provide advice through the lease surrender process. These negotiations can be challenging, but we were able to secure a positive outcome for our client and their tenants. "The team’s detailed and diligent approach to the negotiations created an opportunity to maximise the asset – a brilliant result to a situation that the client initially anticipated being problematic.”