IWG and Noé family at odds over SPV administration

Special purpose vehicle Aberdeen Berry Street Centre Ltd, which operated a Regus centre at 1 Berry Street in Aberdeen, has served notice of its intent to appoint an administrator. The 25,000 sq ft building is owned by Noé Group’s property firm Capreon. It was leased to the SPV, which is is owned by Regus parent IWG, in 2012 on a 10-year lease with no breaks for £620,000 per year. The lease was guaranteed by Regus plc for 12 months. Zvi Noé, partner at Capreon and the Noé Group, said: “We were speaking to them for a significant period beforehand. “They have a lease that runs to 2022 and the view that we took was that they should honour that obligation. “They never offered us more rent when things were going well for them. They weren’t offering to fulfil their obligation and we couldn’t work out something that was equitable for both parties. He added: “Our overall disappointment here is that they signed a lease for a term and are now using the lease structure as a way to walk away. “So if that is how they operate in the market, landlords should be aware that if you sign a lease with a Regus SPV you don’t have the Regus plc standing behind you for any longer period than they are absolutely contractually obliged for and, therefore, the term of your lease is irrelevant. “All that is relevant is the length of the guarantee or the guarantor that you have. “So long as that site is profitable for them, they’ll stay. When it isn’t, they’ll leave so you may as well have a turnover lease or a lease with rolling breaks because it’s effectively all you’re really getting.” A spokesperson for IWG said: “Regus prides itself on the quality of its centres and relationships with its landlords. “Sadly, this building has deteriorated and no longer meets our standards. “We have been trying to negotiate with the landlord for the past 18 months and have made several generous offers of compensation during this period. “However, despite our best efforts, we have been unable to reach an agreement at this stage.” Earlier this year another Regus SPV applied for voluntary liquidation at a building it had occupied since 1999 in west London. Meanwhile, IWG’s Spaces brand has leased a 26,382 sq ft floor at Marischal Square, Aberdeen, which opened towards the end of March, near to 1 Berry Street. IWG is also understood to have agreed to lease 80,000 sq ft at Brookfield’s City of London office development, 100 Bishopsgate, EC3, where it will open a branch of its Signature brand. To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette