Cases - St Martin's Property Investments Ltd v CIB Properties Ltd
Record details
- Name
- St Martin's Property Investments Ltd v CIB Properties Ltd
- Date
- [1998]
- Citation
- EGCS 161, CA
- Legislation
- Keywords
- Commercial property – rent review – hypothetical letting – construction of rent review clause
- Summary
-
The 35 year lease of offices had rent reviews at the end of the tenth year and then five-yearly. The review was to be based on a hypothetical letting 'for a term equal to the original term hereby granted ...' and on the same terms 'including the provisions for rent reviews herein contained'. This required the rent to be fixed as if the premises were being let for the unexpired residue of the term and with rent reviews at the same dates as would arise in reality (without a further initial ten year delay). The lease also imposed an assumption that the willing lessee would not seek a rent free period and that in considering any comparables the existence of rent free periods or rent reductions should be ignored. While this avoided a fitting out discount, it did not allow headline rents to be derived from comparables.
The Court of Appeal carried into the hypothetical lease the break clause as it stood; it also held that the hypothetical term commenced on the original term commencement date, not on the rent review date.