Commercial People has learned that the NHS has agreed to a small rent increase to continue to operate at their current property at Westgate House on Market Street, Warwick.
Owned by the Birmingham-based property investment company Real Estate Investors (REI), various teams throughout the NHS use the two Westgate House floors, bringing their total usage to 27,2315 sq ft.
Ian Clark, asset manager at REI, said: “The NHS’s lease ended last September and it was important to them to have flexibility if new leases were to be signed.
“REI was pleased to work with the NHS and its agents to accommodate that, without damaging our investment values.
“The NHS has now signed two new leases, one for each floor, receiving the flexibility needed in return for a small premium on the rental level.”
A spokesperson for the NHS said that the group wanted to continue using both floors but crucially, “needed more flexibility”, which resulted in a new lease for each floor.
REI acquired the 56,608 sq ft Westgate House back in 2014 for £7.25 million in cash, with other tenants in the building including Boots and Marks and Spencer.
Mr Clark added: “We like to accommodate good tenants like the NHS, balancing out their requirements with the need for REI to extract appropriate levels of yield based on lease lengths from its properties.
The NHS was advised on the deal by Avison Young.