Rent-free deal to save Burges £12m on new HQ
Burges Salmon has cut a deal to save nearly £12m in rent as it prepares to move into its new office building in 2010.
The firm negotiated a two and a half-year rent-free period as part of its 20-year lease at a new development in Bristol’s Temple Quay.
As top-end office rates in the city have not dropped significantly in spite of the property slump, the deal represents a significant saving for the firm.
Richard Rees, a director at Savills in Bristol who worked on the contract, said: ;“They’re ;pretty fortunate that they did the deal more than a year ago when the incentives were substantial.”
He ;said ;developers would be unlikely to consider such costly sweeteners today given the financial pressures on property companies.
Burges Salmon has also eliminated bank debt ahead of the move as it prepares to pay for the building to be fitted out. According to its LLP accounts for 2007-08, the firm has no bank loans or overdrafts on its books, having ;paid ;off ;the remaining £7,000 last year.
However, ;managing partner Guy Stobart said the firm would probably have to take on finance to fund the fit-out.
The Bristol firm currently occupies several buildings at Narrow Quay, where it is understood to be paying between £15 and £20 per sq ft, but that lease expires
in 2010.
It will pay £27.50 per sq ft at the new office, where it will occupy 172,000sq ft – more than three-quarters of the available space at the development.
