NHS pays rental premium for letting in Warwick

The NHS has agreed a rent increase to continue using two floors at a property in Warwick owned by Real Estate Investors (REI), the Birmingham-based property investment company.

Various NHS teams had previously occupied two floors measuring a total of 27,215 sq ft under one lease at Westgate House on Market Street.

They wanted to continue using both floors but needed more flexibility, resulting in a new lease for each floor at slightly higher rental levels.

Ian Clark, asset manager at REI, said: “The NHS’s lease ended last September and it was important to them to have flexibility if new leases were to be signed.

“REI was pleased to work with the NHS and its agents to accommodate that, without damaging our investment values.

“The NHS has now signed two new leases, one for each floor, receiving the flexibility needed in return for a small premium on the rental level.”

Clark added: “We like to accommodate good tenants like the NHS, balancing out their requirements with the need for REI to extract appropriate levels of yield based on lease lengths from its properties.”

REI acquired the 56,608 sq ft Westgate House back in 2014 for £7.25m in cash, with other tenants including Boots and Marks and Spencer.

The NHS was advised on the deal by Avison Young.