Client: Carnival UK
Simon Prichard, head of our offices team is advising Carnival UK on a 21,000 sq m new headquarters acquisition in Southampton.
Carnival UK - owners of the P&O and Cunard cruise lines – occupies a number of offices within Southampton. Until recently, its property strategy had been reactive to business needs; as a result, the structure of its leasing portfolio was haphazard in nature. In addition, many of its property commitments were inherited following the acquisition of a number of distinct brands.
Carnival appointed us to provide strategic agency advice to highlight where existing buildings were failing and what was required from a new HQ office able to accommodate 900 employees. It was also concerned that local advisers were conflicted, acting for landowners and developers in the city.
A project of this kind has several phases. The feasibility stage determined whether it would be appropriate to move Carnival into a single building, taking into account factors such as future headcount, the financial implications and a detailed review of its existing portfolio. The second phase involved an investigation into viable property options for the company, where the advantages and disadvantages – including the impact on staff travel, as well as financial and taxation matters - of each option were outlined and quantified.
The final stage was to agree Heads of Terms with the short listed developer, Development Securities, for 20,979 sq m at the next phase of West Quay. Through aggressive negotiations, we secured for Carnival:
- a rent substantially below market value and
- fixed for over 10 years an option to acquire additional accommodation on pre-determined terms
- a call option on a shell and core, category A or turnkey fitout solution
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