We are looking to turn the short income profile at the property to our advantage, by securing new occupiers and growing rents at lease events. At Fleet House (the largest unit on the estate), DHL committed to a new ten year lease, subject to break, at an initial rent of £0.62 million per annum. Three months rent-free was granted and the initial rent is in line with ERV.
The rent review at unit A, dated February 2015, was settled at £170,000 per annum, a 16% uplift on the previous passing rent and 6% ahead of ERV.
In smaller transactions, we have renewed the lease at unit F2 for a further five years at a rent of £68,000 per annum, 3.5% ahead of ERV and with a four month rent-free period. The September 2016 break option at Unit F3, where the passing rent is £58,000 per annum, was removed in return for a capital contribution to a power upgrade equivalent to three months rent-free. The September 2016 rent review remains open and we expect an uplift.
Over the coming year we have three units with an ERV of £0.58 million per annum coming back due to tenant break options. Due to the strong occupier demand for this estate, two of the units are already under offer with the new leases expected to commence the day after the break date.
Currently we are on-site refurbishing the only vacant unit, which is our largest industrial void at 50,000 sq ft with an ERV of £350,000 per annum. The works will complete in the summer and we currently have strong interest from an occupier to take a ten year lease.
We continue to see strong interest at all size levels on this estate and are in preliminary discussions with occupiers ahead of lease events in 2017.
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