The Shard final

SHTHE RD



SHARTDHE

CONTENTS

3 7 11 19
THE BRIEF THE OPPORTUNITY MARKET CONTEXT THE STRATEGY

29 45 49
WHY KNIGHT FRANK FEE PROPOSAL APPENDICES

Contents 1



The
Brief



SHARTDHE

DEVISE…. IMPLEMENT…. RESPOND….

a comprehensive, all- the agreed strategy with to the changing market and
encompassing & cogent conviction and dynamism to context to evaluate and ensure
strategy to maximise achieve optimum results the strategy remains
performance at rent review appropriate, updating it where
necessary

The Brief 5



The
Opportunity

SHARTDHE

THE
OPPORTUNITY

6 20 month period 150,000 sq ft of Range of floor Wider re-gear initiatives
reversionary potential positions
6 rent reviews

The Opportunity 8

SHARTDHE

THE
CONTEXT

Iconic City tower Proven benefits to Improved London Constrained tower Forecasted tower
occupiers business Bridge station and supply market outperformance
productivity amenities

The Opportunity 9



Market
Context

SHARTDHE

TOWER FORECAST
CENTRAL
City Tower
£100.00
£90.00 YE 2016
£80.00 YE 2017
£70.00 YE 2018
£60.00 YE 2019
£50.00 YE 2020
£40.00 YE 2021
£30.00
£20.00
£10.00
£0.00
Rent (£ psf) Central Months
Q4 2012 £85.00 21
Q4 2013 £85.00
Q4 2014 £85.00 21-24
Q4 2015 £88.50 21
Q4 2016 £92.50 15
Q4 2017 £95.00 12
Q4 2018 12
Q4 2019
Q4 2020
Q4 2021

Net Effective Rent 5 year Historic Headline Rent
Rent Review Performance

Market Context 12

SHARTDHE

IN TERRO GAT ING
TH E FOR ECA ST

£100.00 Tower - Upside Forecast (15,000 sq ft ) Tower - Downside Forecast (15,000 sq ft)
£90.00
Rent (£ psf)£80.00 £90.00
Q4 2012£70.00 £80.00
Q4 2013£60.00 £70.00
Q4 2014£50.00 £60.00
Q4 2015£40.00 £50.00
Q4 2016£30.00 £40.00
Q4 2017£20.00£30.00
Q4 2018£10.00£20.00
Q4 2019£0.00£10.00
Q4 2020
Q4 2021£0.00

Rent (£ psf)
Q4 2012
Q4 2013
Q4 2014
Q4 2015
Q4 2016
Q4 2017
Q4 2018
Q4 2019
Q4 2020
Q4 2021

Net Effective Rent 5 year Historic Headline Rent Net Effective Rent 5 year Historic Headline Rent

Rent Review Performance Rent Review Performance

City Tower Upside Months City Tower Downside Months
£85.00 21 £85.00 21
YE 2016 £85.00 21 YE 2016 £82.50
YE 2017 £87.00 18 YE 2017 £80.00 24-27
YE 2018 £92.00 12 YE 2018 £80.00 27
YE 2019 £97.50 12 YE 2019 £83.50
YE 2020 £100.00 12 YE 2020 £87.50 24-21
YE 2021 YE 2021 18
15

Market Context 13

SHARTDHE

CITY TOWER S U P P LY
PIPELINE

Sq ft Data Clarification

5,000,000 • A tower is a building that has over 15
4,500,000 floors
4,000,000
3,500,000 • PC dates are subject to change
3,000,000 • Data reflects availability in towers of
2,500,000
2,000,000 PC’d space and does not factor in pre-
1,500,000 let availability
1,000,000
2021
500,000
0

2017 2018 2019 2020

Market Context 14

TOWER SHARTDHE
PERFORMANCE
20 FENCHURCH STREET
THE SHARD BROADGATE TOWER

L16 Dec-17 RR (£62.50 psf) L19 & L20 Jun-16 RR settled at £62.50 psf Part L25 U/O at £77.50 psf
Market Context L18 Jul-17 RR outstanding (£62.50 psf) L14 U/O on confidential terms
L17 Sep-16 RR outstanding (£54.00 psf)
15
L11 available quoting £69.50 psf

SHARTDHE

ANGEL COURT SALESFORCE TOWER 30 ST MARY AXE

L19 let Apr-17 at £81.15 psf L35 let Dec-16 at £90.00 psf L22-25 Oct-16 RR settled at £67.82 psf
L14 let May-17 at £76.00 psf L21 Dec-16 RR settled at £71.00 psf L20 Jun-16 RR settled at £62.50 psf
L11 let May-17 at £75.00 psf L17-19 Mar-16 RR settled at £64.00 psf L17 let Nov-16 at £77.50 psf
Market Context
L14 Jun-16 RR settled at (£63.00 psf) 16
L8 & L9 Mar-16 RR settled at £63.50 psf

SHARTDHE

KEY MARKET
SOUNDBITES

KF predict the window for tower rent review There is a significant shortage of tower supply Evidence in other landmark towers is
performance will run to Q4 2021 (and in 2019 before availability increases favourable and conducive to an increase at
beyond) under the central and upside significantly in 2020. There is potential to the first rent review in Q4 2017.
scenario forecasts. The downside scenario create new favourable evidence in 2018/19
forecasts that rent review performance will (when supply is at its shortest) to assist rent 17
end in Q3 2019 – the strategy therefore review performance.
needs to be adaptable and respond to the
changing market.

Market Context



The
Strategy

SHARTDHE

RENT REVIEW
A N A LY S I S

The Strategy 20

SHARTDHE

Level: 16 Level: 15
RR Date: 25th December 2017 RR Date: 23rd December 2018
Passing Rent: £62.50 psf Passing Rent: £63.00 psf
Equivalent Headline Rent £75.00 psf Equivalent Headline Rent £75.60 psf
Assumed Term: 20 yrs. w/yr. 10 break (16m penalty) Assumed Term: 10 yrs.
Agent: Unrepresented? Agent: Cushmans
Sector: TMT - TV Broadcaster Sector: Professional - IP Patent

• Due to timing lag, the strategy for this RR should be considered in isolation • Use time ahead of RR to create evidence in building to set new benchmark to use at RR

• Any increase will help to lay foundations for later RR performance, particularly if no deals • Closely monitor evidence in other key towers to reinforce case
can be engineered in intervening 12 month period following this RR
• Consider using tight third party timetable in lease (arbitrator award within 20 working days
• No agent used on acquisition – opportunity to leverage principal to principal relationship to of appointment) to apply pressure
secure an increase – potentially weakens reliability of evidence but more preferable to have
an increase than to have it documented at a nil increase • Acquired by agent with RR specialism (Cushmans) – consider pre-agreeing if market
deems unlikely to perform
• Possibility of settling RR as part of lease re-gear (waive 2027 break) - subject to covenant
strength

• If no conventional increase achievable, try to structure settlement as part headline and rent
free package (subject to covenant strength) to increase capital value.

The Strategy 21

SHARTDHE

Level: 28 Levels: 4 to 6
RR Date: 1st March 2019 RR Date: 25th March 2019
Passing Rent: £69.76 psf Passing Rent: £55.00 psf
Equivalent Headline Rent £77.51 psf Equivalent Headline Rent £64.08 psf
Assumed Term: 10 yrs. w/yr. 5 break (£1.29m penalty) Assumed Term: 20 yrs.
Agent: Carter Jonas Agent: BGL Partners
Sector: Corporate - Natural Gas Sector: Other - Private Healthcare

• Currently seeking to dispose of accommodation – opportunity to take back to re-let in • Unlikely to impact on other tower floors due to floor position – knowledge of SE1 market
2018? essential to performance

• Alternatively pre-agree RR as part of tenant disposal process (sublet/assignment) • West End agent prone to using straight line NER methodology – we recently increased
rent at 29-33 Tooley Street by 83% against same tenant/agent by exploiting their lack of
• Favourable/flexible premium assumed term SE1 market knowledge and RR specialism

• Non-specialist RR agent – we have recently secured a number of favourable settlements • Tenant’s business model prefers cost certainty – may overpay to crystallise outgoings –
against them – they are averse to going to third party – apply pressure using tight third pre-agree RR ahead of the date? Currently in discussions on another RR against same
party timetable in lease (expert award within 20 working days of appointment) tenant/agent to do the same

The Strategy • Ability to value individual floors or more favourably 3 together (c70,000 sq ft) – obtain
favourable fit out expert input early to argue for inflated fit out period – significantly
reducing NER discount

22

SHARTDHE

Level: 27 North Levels: 27 South
RR Date: 2nd July 2019 RR Date: 29th August 2019
Passing Rent: £80.00 psf Passing Rent: £80.00 psf
Equivalent Headline Rent £90.81 psf Equivalent Headline Rent £92.05 psf
Assumed Term: 10 yrs. w/yr. 7 break (9m penalty & 5m rfp) Assumed Term: 10 yrs. w/yr. 7 break (3m penalty & 5m rfp)
Agent: Crossland Otter Hunt Agent: Savoy Stewart
Sector: Financial - Corporate Finance Sector: Corporate - Alcoholic Beverage

• Superior views from north unit – establish premium? • KF forecasting significant improvement in tower market rents (due to lack of supply) by
• KF forecasting significant improvement in tower market rents (due to lack of supply) by RR RR date

date • Smaller and more valuable part floor – establish premium?
• Smaller and more valuable part floor – establish premium? • Very favourable/flexible assumed term – possible to argue additional break in year 2
• Very favourable/flexible assumed term – possible to argue additional break in year 2 • West End agent – apply pressure using tight third party timetable in lease (expert award
• West End agent – apply pressure using tight third party timetable in lease (expert award
within 20 working days of appointment)
within 20 working days of appointment) • Negotiate in tandem with other Part L27 to assess ‘weaker link’
• Negotiate in tandem with other Part L27 to assess ‘weaker link’ • Wider discussion in relation to Aug-21 break?
• Wider discussion in relation to Jun-21 break?

The Strategy 23

SHARTDHE

STRATEGY TIMELINE

2017 2018
Q3 Q4 Q1 Q2

RENT REVIEW • Conclude lettings of L12 & L18 Al Jazeera
• Focus leasing efforts to agree L16
QUARTERLY 25 Dec 17
ASSET terms on Part L13 - last £62.50 psf
MANAGEMENT remaining landlord unit
ACTION PLAN • Conclude OML on Part L13 unit • Jointly market L28 with South Hook Gas - holding out for the very best deal
• Appoint RR adviser • Begin discussions with South
QUARTERLY • Carry out comprehensive due terms in terms of RR's
RENT REVIEW Hook Gas over possible terms for • Closely monitor corporate activity and opportunities to create favourable RR
ACTION PLAN diligence and devise and agree L28 takeback and monitor
overarching strategy market/building for a new evidence or re-stack occupiers
• Reserve market leading fit out occupier
and M&E (to combat potential
tenant arguments on spec) • Make direct approach to Al • Agree and document an increase with Al Jazeera to crystallise NER as at
experts for the building Jazeera to propose 'friendly'
principal to principal settlement Dec-17
• Monitor market conditions and success of L28 leasing campaign ahead of
• If Al Jazeera appoint an agent,
seek to agree a favourable third Mathys & Squire RR
party appointment who can then • Prepare template Statement of Agreed Facts and evidence proforma to
be 'rolled out' across the building
for later RR's expedite third party process if necessary

The Strategy 24

SHARTDHE

Q3 Q4 2019 Q2 Q3
Q1
Mathys & Squire
L15 South Hook Gas HCA Arma Partners Campari
23-Dec-18 L28 L4 to L6 L27 north L27 south
£63.00 psf 01-Mar-19 25-Mar-19 02-Jul-19 29-Aug-19
£69.76 psf £55.00 £80.00 £80.00
• Continue press releases and marketing to promote ‘The Shard Effect’
(growing occupiers) and keep the building in the market’s mind ahead of • Continue to monitor takeback/re-gear opportunities to create benchmark evidence to support RRs
2018 RR

• Depending on market conditions, • Depending on market conditions, • South Hook Gas RR may not • If no pre-agreement with HCA, use Mathys & Squire settlement and fit out
approach HCA’s agent (BGL consider early approach to exist if space taken back - if not expert input to apply pressure – taking very robust approach with West End
Partners) to propose possibility expert on L15 RR to use third use top office floor position,
party pressure (tight timetable) to favourable assumed term and agent.
of pre-agreeing RR to provide reach positive settlement agents reluctance of third party • Carefully consider two L27 RRs in the context of one another. Instigate
to maximise performance ahead
them with cost certainty of L27 RRs simultaneously and then seek to exploit weaker link/most reluctant to incur

third party costs.
• Wider re-gear discussion in relation to 2021 breaks on L27 demises?

The Strategy 25

SHARTDHE

THE KEYS TO
UNL CKING

RENT REVIEW
PERFORMANCE

The Strategy 26

SHARTDHE

01 02 03 04 05

Finalise leasing campaign in Secure an increase with Al Explore takeback of upper Continue the Reserve market leading
2017, well ahead of start of Jazeera to lay foundations floor (L28?) to set new experts (fit-out and M&E)
main RR cycle in Q4 2018 for future reviews benchmark rent for the marketing/press campaign
building to keep building in market’s
mind as ‘the most exclusive
building to occupy’

06 07 08 09 10

Identify and agree Exploit West End agents’ Exploit HCA’s preference for Control sub-tenant quoting Continually monitor
favourable third party unfamiliarity with towers cost certainty to potentially rents and deal terms corporate activity/takeback
candidate to roll out across and preference for adopting pre-agree RR at inflated and re-gear opportunities to
RRs by private appointment straight line NER level create favourable evidence
where possible methodology

The Strategy 27



Why
Knight Frank?

SHARTDHE

YOUR TEAM
CORE

SIMON AUSTEN FIONA RATCLIFFE JAMES THISTLE
Partner Partner Associate
Head of Central London Lease Advisory City Lease Advisory City Lease Advisory

Key clients: Key clients: Key clients:
• St Martins • Land Securities • Blackstone
• British Land • M&G • Deutsche Asset Management
• Blackstone • St Martins • Standard Life
• Delancey • Henderson Global Investors • Derwent London

Why Knight Frank Full CVs for the core team can be found in the appendices

30

SHARTDHE

YOUR TEAM
EXTENDED

JOHN SNOW BEN GLICKMAN PHILIP HOBLEY DAN GAUNT PATRICK SCANLON
Proprietary Partner Partner Proprietary Partner Proprietary Partner Partner
Head of Commercial West End Lease Advisory West End Agency City Agency Head of Central London Research

Why Knight Frank 31

SHARTDHE

OUR TOWER SUCCESS:
B R O A D G AT E TOWER

THE CHALLENGE… THE RESULTS…

12 £ 24 25% average 5 caps
rent reviews increase achieved
month period in rents

5 assumed 6 different £1m £62.50 the
tenant agents highest
term variations increase in rent roll psf net ever in
effective Broadgate

BRITISH LAND

Why Knight Frank 32

THE EXECUTION… SHARTDHE

01 Undertook detailed analysis of Delayed instigating the 5 07 Persuaded L19 & L20 agent to base
capped reviews until L21 settlement on agreed L11 terms (even
review provisions, identified 04 settlement achieved, which though transaction didn’t ultimately
tenant’s agents and corporate made documenting these at the complete) to secure benchmark
caps a formality settlement at £62.50 NER
activity etc.
08
02 05
In negotiations
Expedited discussions with Worked with client to on L17 & Part
L12 tenant (who were identify potential L18 RR –
unrepresented) to reach takeback opportunities seeking new
favourable settlement and took surrender of record rents
L11 to refurbish and re-
let 06 33

03 Delayed negotiations
on L19 & L20 to allow
Used favourable legal opinion (on break leasing team to agree
importation into assumed term) and third party cost terms on vacant L11
pressure to achieve above value settlement with
L21 tenant (advised by CBRE)

Why Knight Frank?

SHARTDHE

OUR TOWER SUCCESS:
DASHWOOD
THE RESULTS…
THE CHALLENGE…

19 £ 24 25% average 47% highest
rent reviews increase increase
month period in rents

9 assumed 11 different £1.5m Significantly
tenant agents outperformed
term variations increase in rent roll 125 Old
Broad Street

LAND SECURITIES

Why Knight Frank 34

SHARTDHE

THE EXECUTION…

01 Prepared an initial strategy Expedited discussions with L17 07 Linked consent for L12 subletting
report on review provisions tenant (who were unrepresented) to their review settlement to
(assumed terms in particular), 04 pointing to L13 renewal to achieve facilitate inflated review evidence
tenants agents and corporate benchmark upper floor review before using this against Part L13
activity etc. settlement & L16 tenants

02 05 08 Delayed
negotiations on
Persuaded JLL to pay Used L17 settlement to lower floors to
nominal increase on L8 to agree L14 & L15 rent allow open
crystallise value as Mar-14 reviews (against CBRE) at market letting to
at first RR – to argue this the capped levels – complete on L1
was at least ‘rack-rented’ agreeing rents above the
cap with a small rent free 06 09
03 period
Agreed Part L7 RR against Used the open market
Devono (not a City market evidence and previously
specialist) before turning to created RR evidence to
other Part L7 to document at conclude remaining
the cap outstanding reviews at
premium levels

Improved terms for a lease renewal on
Part L13 to create favourable
evidence that client was otherwise
agreeing at a less helpful level

Why Knight Frank? 35

SHARTDHE

PROVEN PERFOR MANCE

SALESFORCE TOWER, 30 ST MARY AXE,
EC2 EC3

LANDMARK AND • 40 storey tower comprising 460,000 sq ft IVG, LAB-49 AND • IVG/Receivers (Landlord)
PARTNERS GROUP completed in 2011 by Heron; ION • Advised IVG (and subsequently the
receivers) in relation to the Swiss Re
• Landmark (Tenant) October 2013 rent reviews on L2 to 3
(26,700 sq ft) & L4 to 15 (195,000 sq ft);
• Advised Landmark in relation to their • Outcome: Asset sold with RRs
March 2016 rent review deliberately left outstanding

• Levels 17 to 19 comprising c37,000 sq ft • Lab-49 (Tenant)
• Advising Lab-49 in relation to Jun-16
• Outcome: Settled by negotiation @ rent review on L2 (13,500 sq ft);
£64.00 psf NER (£1.50psf pa increase) • Passing off £40.00 psf;
• Outcome: In negotiations and early
• Instructed to settle at an increase due to stages of third party;
imminent sale of business to i2
• ION Trading (Tenant)
• Partners Group (Tenant) • Advising ION Trading in relation to Jun-
16 rent review on L26 & Nov-16 rent
• Advised Partners Group in relation to review on L16;
their Sep-16 rent review • LL quoted 10% & 22% increases;
• Outcome: In negotiations
• Level 14 comprising 13,000 sq ft

• Outcome: Settled by negotiation @
£63.00 psf

Why Knight Frank? 36

SHARTDHE

ST MARTINS MORE LONDON ESTATE BLACKSTONE DEVONSHIRE SQUARE
SE1 EC2

• Landmark 1.9m sq ft Southbank mixed use • 625,000 sq ft mixed use estate comprising 12
estate completed in 2002 office buildings

• Sole rent review adviser from 2014 to 2016. • Appointed to negotiate on all lease advisory
Contract renewed in 2016 matters

• Settled 9 rent reviews since appointment • Overarching strategy agreed from the outset
(c250,000 sq ft) ahead of a number of rent reviews, ensuring
logical approach adopted
• Uplifts of between 15 to 50% achieved on all
rent reviews • Settled three reviews in 6 Devonshire Square at
52%, 85% and 94% increases
• Currently reporting or in negotiations on a
further 365,000 sq ft of rent reviews • Settled 3rd Floor rent review in The Bengal
Wing at £59.00 psf net effective, a benchmark
• Completed 3 lease re-gears and 1 lease level for the estate
renewal
• Worked with leasing team to complete a re-
• Worked with our leasing team to secure a gear in 9a Devonshire Square which involved
surrender of a c13,000 sq ft unit at a £1m pre-agreeing a rent review
premium to facilitate a re-let

Why Knight Frank? 37

SHARTDHE

BROADGATE QUARTER 150 CHEAPSIDE
EC2 EC2

BLACKSTONE • 450,000 sq ft office scheme completed in 2 ST MARTINS • 200,000 sq ft scheme completed in February
phases (2001 & 2006) 2009
Why Knight Frank?
• Blackstone acquired the building in 2015 and • Instructed to advise the landlord in relation to all
we were subsequently instructed to advise 2015 & 2016 rent reviews
them on a series of rent reviews – displacing
the incumbent agent. • Settled March 2015 rent review on 1st, 2nd &
Part 3rd Floors (54,651 sq ft) achieving a 20%
• Overarching strategy agreed from the outset increase.
ahead of a number of rent reviews, ensuring
logical approach adopted • Settled October 2015 rent review on 5th & 6th
Floors (46,285 sq ft) against AIG at £58.36 psf,
• Successfully settled the June 2015 rent reviews an uplift of over 10%.
on L5 & L6 9 Appold Street, securing increases
of 10% on a 15 year old specification; • Achieved a net effective rent of c£58.00 psf on
the August 2016 8th Floor (11,393 sq ft) rent
• Successfully negotiated settlements on L5 & L6 review.
1 Snowden Street (April 2016) at £52 & £55psf
NER representing increases of c25% on a 10 38
year old specification;

• In negotiations on L8 & L9 9 Appold Street
(40,000 sq ft) and Part L2 One Snowden Street
(10,000 sq ft);

• Worked closely with leasing team and asset
manager to ensure comprehensive strategy.

SHARTDHE

PLANTATION PLACE, 88 WOOD STREET,
EC3 EC2

• 547,390 sq ft Grade A building developed by • Advised private investor on purchase of this
British Land and completed in 2004. c250,000 sq ft core City asset working with our
Capital Markets team
• Instructed to advise the landlord on rent
reviews on space in excess of 300,000 sq ft • Appointed to negotiate all lease advisory
matters following acquisition
• November 2014 on Levels 8 & 13 (50,720 sq ft)
settled at an overall uplift of £1.30 psf across • Settled Level 16 at £71.50 psf net effective, one
the floors. of the highest settlements in the City market
this cycle
• Settled April 2015 rent reviews on Levels 10 to
12 (48,928 sq ft) at a c£5.00 psf uplift • Settled Level 17 at £70.00 psf net effective and
Level 12 at £59.50 psf net effective
SHAW GROUP
• Agreed a lease re-gear with an existing
occupier, extending their occupation by 5 years

DELANCEY

Why Knight Frank? 39

ST MARTINS LONDON BRIDGE CITY, SHARTDHE
SE1
2 & 3 BANKSIDE,
• Landmark 1.0m sq ft Southbank estate SE1
• Sole rent review adviser from 2016 onwards
• Settled 29-33 Tooley Street rent review against  415,000 sq ft arranged over 2 buildings
developed in 2007 by Land Securities
HCA at 83% increase in passing rent
• Achieved c50% increases on 2 further 2016  Instructed to advise the landlord on
September 2017 rent reviews of the whole
rent reviews against RBS
• Currently in negotiations on a further 75,000 sq
 Appointing fit out & M&E experts
ft of rent reviews  Outcome: Quoted £8Mpa increase (50%) -
• In discussions with HCA to pre-agree a January
in early negotiations
2018 rent review
40
M&G

Why Knight Frank?

SHARTDHE

WE ALSO
ACT FOR…

Why Knight Frank A full list of the Central London office rent review clients for whom we have acted for in the last 2 years is included in the appendices.
41

WHY FRANK? SHARTDHE
KNIGHT
42
1 Extensive knowledge 2 Client relationship 3 Tower expertise 4 Unrivalled multi-let
of the building focused, providing landlord rent
a bespoke service (for owners and review track
occupiers) – we’ve record

done this before

5 Experienced, dynamic 6 Heavily strategy 7 Market
and enterprising team focused and embedded
– here until 2019 and results orientated Central London
approach team
beyond!

Why Knight Frank

SHARTDHE

DON’T JUST TAKE
OUR WORD FOR IT…

EDWARD ATTERWILL “ By devising a comprehensive strategy to handle a large “
Asset Manager volume of rent reviews falling over a short period at
T: 020 7467 2842 Dashwood, the Knight Frank City lease advisory team
M: 07739 292909 have exceeded expectations in the results they have
[email protected] secured at rent review. They provide a high level of
PA Lynsey Thomas, D +44 (0) 20 7467 2813 technical due diligence together with sound commercial
advice and I would have no hesitation in recommending
ANDREW LEWIN them to landlords elsewhere in the City.
Asset Management Director
T: 020 7448 1464 Tim James
M: 07770 914 555 Portfolio Manager – Land Securities
[email protected] (now Longmead Capital LLP)
PA Sarah Doherty, T: +44 (0)20 7448 1474
43
Why Knight Frank



Fee
Proposal

SHARTDHE

As requested in the RFP, we set out two fee bases as follows:- A

FEE BASIS

1. Initial Report Fee 3. Third Party Fees
We do not propose to charge a separate fee for the provision of an in initial report setting Third party work will be charged in addition at the following hourly rates:
out our recommendations on the overarching strategy and the resources required to
conduct the 6 rent reviews. • Simon Austen (Partner): £395 per hour
• Fiona Ratcliffe (Partner): £300 per hour
2. Rent Review Negotiation Fees • James Thistle (Associate): £225 per hour
For reporting on, negotiating and settling a rent review by negotiation, we propose to
charge a base plus incentive fee (based on a percentage of the uplift achieved in one The time incurred in preparing a Statement of Agreed Facts will not incur a time charge fee.
year’s rent) as follows:-
The hourly rate fee does not include fees charged by any technical experts which will be
Passing Rent Base Fee Incentive (1) Total Fee Cap charged in addition (but they would only be instructed once their fee basis had been agreed
(£ per annum) (per lease) with you separately).

£0 - £1,000,000 £5,000 P 25%
L 22.5%
£1,000,001 - £2,000,000 £10,000 U 20% 3% of revised
S rent

£2,000,000 + £15,000

(1) Calculated as a % of the uplift achieved in one year’s rent over and above any minimum increase specified in the lease. 46
Fee Proposal

SHARTDHE

FEE BASIS B

1. Initial Report Fee CONFLICTS OF INTEREST
We propose an in initial report fee, setting out our recommendations on the overarching As a Central London Lease Advisory team, we have not acted for any of the occupiers in
strategy and the resources required to conduct the 6 rent reviews, of £15,000. the building.
2. Rent Review Negotiation Fees
For reporting on, negotiating and settling a rent review by negotiation, we propose to We have carried out conflict of interest checks and have established that as a firm, we
charge a purely incentive based fee of 75% of one year’s increase in rent, subject to a only have recent/ongoing fee earning relationships with the following occupiers:-
cap of £2.00 psf.
3. Third Party Fees • GTM (Acquisition of accommodation in The Shard);
Third party work will be charged in addition as set out in Fee Basis A. • Mathys & Squire (Disposal of accommodation in The Shard);
• Khazanah (Acquisition of accommodation in The Shard);
MISCELLANEOUS
If the rent reviews are documented as part of a wider lease re-gear, we would agree an We confirm that if we are appointed to act on your behalf, we would not provide rent
alternative fee basis with you to reflect the specific circumstances of the lease re-gear. review advice to any occupier in the building. We do take conflicts of interest extremely
VAT and reasonable out of pocket expenses are in addition. seriously and the firm’s protocol for handling potential conflict of interest situations is
available on request.
Fee Proposal
PROFESSIONAL INDEMNITY COVER & LIMITATION OF LIABILITY
We will provide PI insurance cover up to a limit of £10,000,000 (ten million pounds) in
respect of each and every claim arising out of any one event.
A cap on liability will apply of £10,000,000 (ten million pounds).

47