Client: Derwent London - Soho
Our client, Derwent London, is the freeholder of a block of flats in Soho, located on Marshall Street, just off Carnaby Street. Following a statutory claim for a lease extension by one of the tenants, the head leaseholder management company approached our client.
They wanted Derwent to grant a 90 year extension to the headlease, allowing the remaining 35 flat owners within the block to also extend their leases, without the further ad hoc involvement of the freeholder.
Derwent London appointed our residential leasehold reform team to negotiate the price with the headlessee.
The solution
A management company whose chairman spearheaded the negotiations on the leaseholders’ behalf controlled the block. The methodology for valuing the overall premium was to inspect a representative sample of the main flat types, collate information on comparable property sales in the Soho area and estimate what individual premium receipts would be due on a day one basis, assuming all underlessees served a statutory notice for extending their leases.
The results
Our negotiations ensured the deal remained outside of the leasehold reform legislation, netting £2.1m in a single transaction for Derwent London, an increase of £400,000 from the headlessee’s original offer.
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