Watts International
Watts and Chainbow had worked together on projects for a long number of years and it was as a result of a casual conversation with Jo Stocks in 2004 that their plight was unearthed. They had been trying to resolve their accommodation needs by consolidating into one building in London. The had occupied a building adjacent the Haymarket Theatre for a long time but also now had offices in the City. The Haymarket office was inefficient, cramped and did not allow the flexibility they required nor meet the needs of modern office space. Previous instructions to others to resolve the problem failed and Watts were becoming resigned to have to spend the next decade paying out for space that inhibited their growth.
Roger Southam embarked on meeting the landlord and persuading them to sell the building to Watts to allow them to quash their lease. He then sought a purchaser of the property from Watts who would have the opportunity to develop out the site. At the same time swapping the 10 year lease they held into a flexible lease of between 18 months and 2 years to allow Watts to take new premises. In addition Watts picked up the project management of the development scheme!
So from being set a challenge he was told he would never achieve, in 6 months Roger had turned a millstone in to a profitable situation for Watts.
“For a number of years my firm had been trying to dispose of its lease on an office building in London’s West End. The property in question was no longer suited to our needs and was proving extremely expensive to occupy. However, all our efforts were thwarted by a combination of factors, including the weakness of the market in terms of tenant demand, the poor quality and configuration of the building, and a general ‘ambivalence’ on the part of our Landlord.
Having almost resigned ourselves to staying put and committing to the remaining 10-year term of the lease, we happened to discuss the situation with Roger Southam to see if he could give us any fresh ideas that might help us unlock the problem situation. His immediate response was one of optimism and an insistence that anything could be achieved if enough thought and sheer dedication was applied.
Roger quickly developed a strategy that would involve us purchasing the property from our landlord and ‘seamlessly’ selling it on to a third party. The success of the overall deal was also dependent on us being able to surrender our lease to the eventual new owner. “Easier said than done” one might think.
Stage 1 – Roger identified a prospective purchaser for the building and negotiated an ‘in-principle’ agreement, subject to price, that included the ability for us to surrender our lease following completion of the transaction. Stage 2 – Roger obtained confirmation from our Landlord that they would be willing to sell to us, obtained a sale price and a sale and purchase contract. Stage 3 – Roger put in place a special purpose vehicle that would be used to purchase the property and then simultaneously sell it on to the ‘real’ purchaser. Stage 4 – the entire deal was successfully transacted and completed.
We are now well on the way to vacating the West End building and bringing all our London based staff together under one roof in the City. Aside from the advantages of having all our staff in one building, we will be saving in the order of £200,000 per annum on our London accommodation costs.”
To say the least, this was an extremely impressive piece of work by Roger Southam and probably only made possible by his ‘can-do’ attitude, his undoubted negotiating skills and his determination never to give up and always find a solution to a problem. He comes highly recommended!
Jo Stocks - Managind Partner - Watts and Partners
