Sbh.uk’s rent review team is boasting a rent saving totalling more than £1m for a single building as it looks back on 2005 as one of its most successful years.
Over the past five years sbh.uk has handled rent reviews for more than 92,900 sq m (10 million sq ft) of warehouse space. Average savings during this period have reached 70p per sq ft or £70,000 each year for a 9,290 sq m (100,000 sq ft) building. Sbh.uk only works for occupiers, which, it says ‘ensures total commitment to the occupier’s case without any conflict of interest’.
sbh.uk’s Andy Melvin explained: “Landlords have continued to hold out for high rental increases when in certain parts of the UK increases have been modest or negligible. They frequently quote high headline rents achieved on the most recent developments. But the net rent – taking into account incentives such as free periods, stepped rents and contributions to fitting out – ends up far lower. Our success has been achieved by getting to the bottom of such deals and making sure that clients pay no more than the true market value rather than headline rents.”
A recent deal in Heathrow with a headline rent of £161.47 per sq m (£15 per sq ft) actually included a six month rent free period. However, the deal is a record breaker being nearly £10.76 per sq m (£1 per sq ft) higher than any other comparable deal in recent years.
Saudi Arabian Airlines (SAA), advised by Savills, pre-let 6,524 sq m (70,220 sq ft) of warehouse premises for use as a cargo handling unit at its site on Bedfont Road, Heathrow to Plane Handling.
The specialist cargo handler, a subsidiary of the Go-Ahead Group, agreed a rent of £161.47 per sq m (£15 per sq ft) on a 15-year lease with no break clauses. There is in effect a six month rent-free period on commencement of occupation at the site.
Construction of the new building, designed by Reid Architects, is underway with completion due in late summer. Savills is assisting SAA with the redevelopment by way of a development manager role, while design and construction is being project managed by Matrix Project Services.
Richard Sullivan of Savills, who is advising Saudi Arabian Airlines, said: “This transaction creates a new high for the Heathrow market and by definition in the UK, it underpins West London as the prime warehouse location.”
The three-acre (1.2 ha) site, located to the south of Heathrow airport, was acquired by SAA in the 1970s for operational purposes. Geologistics formerly occupied the site until October 2005 in a building originally developed by Ronnie Lyon. Lambert Smith Hampton advised Plane Handling.