Proactive Lease Renewal Negotiation Secures Long-Term Income for Landlord in Teddington

Background

A proactive approach enabled our client to avoid a vacant building and instead secure a new 10-year lease with a reliable tenant.

Our client owns a 24,000 sq. ft. property in Teddington, originally built as an office but more recently leased to the Secretary of State and sublet to the NHS, where it now operates as a mental health support centre. With the NHS well-established in the space, the landlord was keen to retain a secure income stream and avoid any disruption to occupancy.

The Lease Renewal Challenge

The Secretary of State was set to exercise a break clause, which meant that, under the original lease terms, they were required to return the property with vacant possession.

For the landlord, this posed a significant risk:

• The NHS would be required to vacate, even though they were a long-term, stable occupier.
• The landlord would be left with a vacant building and no rental income.
• A void period would result in additional costs, including maintenance and business rates liabilities.

Without a strategic approach, the landlord could have faced months, if not years, of uncertainty over when the property would be re-let.

Proactive Lease Renewal Negotiation

Recognising the risk, the landlord sought our advice well before the break date. This gave us time to explore options and negotiate a commercially beneficial outcome.

Key Steps Taken:

1. Negotiating a Reversionary Lease with the NHS
We worked closely with the NHS to secure a reversionary lease, ensuring they could remain in occupation beyond the Secretary of State’s lease break. This provided the landlord with a new, direct lease agreement and long-term income security.

2. Amending Break Conditions for the Secretary of State
To facilitate the transition, we negotiated revised break terms with the Secretary of State, allowing them to terminate their lease without requiring the NHS to vacate.

By engaging early and managing negotiations effectively, we ensured a seamless transition and avoided any risk of vacancy.

The Outcome of the Deal

✅ The landlord now has a secure 10-year lease with the NHS.
✅ The risk of a void period has been entirely removed.
✅ The transition was handled smoothly, minimising disruption to all parties.
✅ The landlord retained control over the lease structure, ensuring the property remained income-generating.

This result was only possible because the landlord sought advice well in advance of the lease break date, allowing for a strategic and commercially beneficial solution to be agreed.

Key Takeaways for Landlords

• Commercial lease renewal negotiations should not be left to the last minute. Proactive planning provides more flexibility and better outcomes.
• Lease break clauses and renewal terms can often be negotiated to avoid unnecessary vacancies.
• Engaging early with tenants and their advisors ensures landlords retain control, protect income, and secure long-term occupational agreements that align with their investment strategy.

If you have a commercial lease renewal negotiation approaching, early intervention is key. To discuss your options, get in touch.

Contact Simon Harper, Partner

Direct Line: 01494 689614
Mobile: 07801 109649
Email: SRH@jaggardmacland.co.uk