Property management and development of permanent endowment estate
Advising an endowed charity, the Dame Alice Owen Foundation, on the grant of a 10-year lease at a market rent
The charity Dame Alice Owen Foundation dates back to 1613 and continues to manage the permanent endowment comprising land in London EC1. Over many years we have assisted the Foundation in the property management and development of this site which provides income for its grant making activities. The governance structure is unusual in that the Foundation’s trustee is the Brewers’ Livery Company. This transaction was an agreement for the grant of a 10-year lease at a headline rent of £240,000 per annum, subject to the grant of planning permission for a change of use and the consent of the superior landlord to the change of use and to the works and its alteration.
Negotiations threw up several points relating to the conditionality of the planning, the works for alterations and the appropriate profit test to be applied in the rent deposit deed. The initial proposal with regard to the latter was a profit test that applied to the entire group of which the tenant was a member, but we pointed out a potential problem of teeming and lading and the possible inadvertent release of the tenant as a result of profits generated elsewhere in the group. The point was conceded.