Client: Cummins Engine Company - Sopwith Way
Due to its continuing success and expansion, Cummins Engine Company’s 44,000 sq ft logistics warehouse at Badby Park - acquired on its behalf by Gerald Eve in 2004 - became too small for its requirements.
It re-appointed our agency team to acquire larger facilities, whilst disposing of its existing facility as quickly as possible to limit its financial liability. The original lease had been secured on a 15 year lease with a tenant’s 10 year break, with six years unexpired.
Location was a key consideration for Cummins. In particular, the new facility needed to be in proximity to its main manufacturing facility on the Royal Oak Industrial Estate.
Solution
We quickly carried out a review of the availability of existing new/modern buildings in the local market, and analysed all relevant options, including those on the open market which were not wholly suitable. We next advised on lease structure, rental costs, fit-out and overall specification issues.
Following an extensive search of the immediate locality - including directly approaching local occupiers - we entered into negotiations on an off-market solution which provided the ideal size of building and standard of accommodation within close proximity to the manufacturing plant.
The results
Whilst being limited to very few realistic opportunities, we achieved significant rent saving of 0.35p per sq ft on the original quoting price and a rent free period equivalent to 18 months rent. The lease was based on a 10 year term commencing after fit out had been completed. The rent free savings were transferred into capital contribution to off-set the extensive fit-out works. The savings equated to in excess of £950,000 against the quoted terms.
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