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WH Smith Retail Holdings Limited v Commerz Real Investmentgesellschaft mbH

This is a judgment following a four-day hearing of the claimant’s unopposed application for a new tenancy of retail premises in the Westfield Centre, Shepherd’s Bush.

The claimant (“the tenant”), is WH Smith Retail Holdings Ltd, and operates a large branch of its retail operations at units P201 and 1087/1088 of the Westfield Centre (“the premises”).

The defendant (“the landlord”) has a long leasehold interest in the premises, as well as in the whole, or substantially the whole, of the Westfield Centre.

The current lease, dated 8 December 2009, was for a term of 10 years commencing on 1 October 2008, and has continued under the Landlord and Tenant Act 1954 (the Act), at a passing rent of £953,000 pa, based on a rate of £327.50 Zone A, set by an arbitrator on the 2013 rent review. The tenant served its s26 request for a new tenancy on 23 March 2018. The current lease will expire 3 months and 21 days after judgment (s64).

Most of the terms of the new lease have been agreed between the parties, including its term (5 years), but some remain in issue. The matters in issue are the rent payable under the new tenancy, the list of services comprised by the service charge, the trigger for a pandemic rent suspension clause, and the interim rent payable until the new tenancy is granted.

The court must determine the terms of the new tenancy under s35 of the Act before moving on to determine the rent payable, because those terms are likely to have an impact on the market rent to be ascertained under s34.

The parties each called one lay witness. Ms Belinda Burnstone, head of WH Smith property maintenance and estates, gave evidence for the tenant, and Mr Michael Catton, Rent Review and Lease Renewal Manager for Westfield Europe Ltd, the landlord’s managing agent, for the landlord. The parties also relied on two highly experienced expert valuers of commercial property, Ms Catriona Campbell of Gerald Eve LLP (for the tenant) and Mr Joel Bancroft of Smith Young (for the landlord). The case was heard over 4 days from 17-20 November 2020.

Full Judgment can be viewed here

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