Rent-free deal to save Burges £12m on new HQ

Rent-free deal to save Burges £12m on new HQBurges 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.