1 Tennant Avenue, East Kilbride
The client owned a 150,000 sq.ft. distribution warehouse, let to a tenant suspected to be in financial difficulty, with over 5 years left on the lease term.
With little confidence that the tenant could continue with the rental payments, we renegotiated the terms of the lease with the existing tenant, increasing the rent from £535,000 per annum to £605,000 per annum, in exchange for granting a tenant’s break option at year 2 and further securing a bank rental guarantee.
This resulted in the running yield increasing from 8.9% to 10.2% and a capital increase in the region of £1M. In addition, this agreement resulted in added rental security for the client.