VGI Partners

VGI Partners is a high conviction global equity manager that looks after the wealth of high net worth individuals, private wealth management advisory firms and endowment funds. The company is based in Sydney and New York.

With an upcoming lease expiry and demolition works happening close to their existing office, VGI wanted to assess the market alternatives to their existing premises. Being a stand-alone, heritage-listed terrace house, finding similar options in the desired area would be a challenge.

VGI appointed Tenant CS to canvass the commercial market for alternative heritage-listed properties and to benchmark rent levels in case an extension to the existing lease could be negotiated.

• A street-by-street inventory of heritage buildings and available options within the preferred area was provided to the VGI Partners team
• A benchmark level for rent was determined based on similar available heritage properties and A-grade premises
• Inspections of selected premises were conducted, lease proposals requested, and a shortlist was created based on suitability
• Terms for a possible lease extension were discussed with the existing landlord, with a focus on reducing future ‘make-good’ obligations and disturbance of quiet enjoyment
• Secured the most suitable and preferred option

The property search showed that alternatives for heritage buildings were extremely limited. A rental benchmark also revealed that the rent that VGI Partners was paying in their existing premises was fair, and, in some cases, lower than the market average.

An extension to the lease was negotiated against benchmarked and realistic future rents. Particular focus was paid to mitigating the risks surrounding future demolition works and re-negotiating the existing ‘make good’ clause to a bare minimum.