This Legal Case Will Decide Whether Brexit Means Tenants Can Break Their Lease
A case is being heard in the High Court which has the potential to allow tenants to use Brexit as a reason for breaking leases.
The European Medicines Agency is leaving the 250K SF office it occupies at 25 Churchill Place in Canary Wharf, which is owned by Canary Wharf Group, because it needs to be based in the European Union.
It is claiming that because it is so inextricably linked to EU institutions, Brexit is an event that should allow it to break its lease, Bloomberg reports. It has a 25-year lease running to 2040 paying £46.50/SF, meaning it will pay around £500M over the course of the lease.
Canary Wharf Group filed a legal claim looking to enforce the lease, Bloomberg said, and argued at a hearing in July that if the EMA was allowed to break its lease, other organisations like banks or manufacturers could also use Brexit as a reason to do the same. Canary Wharf Group said a decision should be made before Brexit becomes reality in March.
In more unambiguously positive news regarding pan-European institutions and their London occupancy needs, the Financial Times reported that the European Bank for Reconstruction and Development will be staying in London, and in fact, may be moving to an office in Canary Wharf from its current HQ at Broadgate.
Unlike the EMA, the EBRD isn’t an EU institution, but instead is owned privately by various European national governments, including the U.K.