Renewal of lease for major toy firm

Slough councillors have agreed the renewal of leases for a major toy company to remain as tenants in a building on the Slough Trading Estate.

Capital Point at 33 Bath Road was acquired by Slough Borough Council (SBC) in 2018 as an investment property and Lego Company Ltd are tenants in part of the property, occupying under two leases.

The leases are due to expire on June 23 this year and after months of negotiation between the company and the council, lease terms have been agreed.

Cllr Wal Chahal, member for council assets explained to members at a special cabinet meeting at Observatory House on Tuesday, March 5 that the details of the agreement are confidential.

He added that the negotiations were carried out with the tenants by real estate company Avison Young on the council’s behalf.

Cllr Chahal said: “The advice from Avison Young is that the terms agreed represent the best consideration responsibly obtainable in the current market conditions.

“The proposed [leases] will secure additional rental income for the council should we keep the asset or additional increased capital value benefit in the event the council decides to dispose of the asset.”

Council leader Dexter Smith, said: “Very much the intention behind this is that we want to keep [the Lego Company Ltd] as a tenant, but we also want to maximise the value of the asset.”

Cllr Iftakhar Ahmed (Con, Wexham Court) sought clarification over whether there was clause built into the agreement which states that if the property is being disposed of or the landlord wishes to redevelop then the lease is surrendered.

Cllr Smith explained that there are currently two leases which will end, and the council is bringing them to a conclusion ‘a bit earlier’ to align them with each other.

Pat Hayes, executive director for regeneration, housing and environment, said: “If we were to sell the building, we would sell it with the lease in place.

“We wouldn't want to terminate the lease and then sell.

“Clearly once the two leases are in line, they do have break clauses and break points, so we could at a future date move Lego on.

“I mean it’s highly unlikely to be honest as they're a blue-chip tenant and the building has significant value with them in place and we wouldn't be looking to move them on to unless the market changed very, very drastically.

“This is more about aligning their two leases together, keeping them there and giving us a saleable asset with a strong lease from Lego.”

In line with the recommendations, councillors unanimously to grant the renewed leases.