The collapse of Boo.com has shown landlords the benefit of taking a cautious approach to dotcom tenants with pragmatic landlord Shaftesbury taking less of a hit than the more optimistic Crown Estate.
Shaftesbury required a “substantial” lease deposit, believed to be in excess of 12 month’s rent, for the 447 sq m (4,810 sq ft) of office space it let to Boo.com in Carnaby Street, W1. But the Crown Estate did not agree such a deal with the online clothing retailer when it leased 2,600 sq m (28,000 sq ft) until 2003 at Chesham House, Regent Street, W1.
Peter Levy, chief executive of Shaftesbury, said: “We took a pragmatic view which has given us the leeway to re-let the building without losing money.” He said some landlords were fundamentally opposed to dotcoms, especially if they planned to sell the investment of a building, as institutions would require much better covenants.
CB Hillier Parker, which acted for the Crown Estate, said it had not been able to secure a rent deposit from Boo.com, but that the firm’s backing had persuaded them it was not necessary. “The building was scheduled for redevelopment anyway, so a short-term let was a bonus. And they have paid us until June.”
EGi News 18/05/00
