Following a four-day hearing, culminating on June 18, the High Court case of S Franses Limited v Cavendish Hotel (London) determined the rent set in a new lease for the gallery on Jermyn Street should be £102,000, less than half the previous passing rent of £220,000.
Presiding Judge Parfitt also ordered the landlord to refund almost 30% of the interim rent the company had paid since expiration of their lease in 2016. The amount of interest and costs will be considered by the judge at a future date.
The case centred on a dispute over the lease and rent at 80 Jermyn Street, St James’s, where the gallery had operated for 27 years.
It follows a six-year battle and a Supreme Court ruling in December 2018 (after earlier decisions and appeals) which had ordered the landlord to grant a new lease. The previous lease had come to an end in 2015.
The Cavendish Hotel (a subsidiary of Singapore’s CapitaLand) instead had planned to redevelop the space and had hoped S Franses would leave.
Joanne Wicks QC of Wilberforce Chambers, instructed by David Cooper & Co who acted for S Franses, said the decision will be of “interest to the market, which is keen to understand how the courts are likely to approach the valuation challenges that the pandemic (and resulting steep decline in West End rental values) has brought”.
“Incredibly important judgment”
S Franses director Simon Franses said: “This is an incredibly important judgment and is great news for us and for tenants. There are 12 empty [or soon to be empty] shops along Jermyn Street. We want art and antiques galleries to know that this area is now affordable. This is one of the few central London locations that are now attractive for galleries again.”
He added: “This period has been very tough for us. During the Covid pandemic we had no income and had this court case to deal with. It has been very tough but we are thankful for the result.”
Franses added: “It was thanks to the painstaking research into rental comparables by our expert John Buckingham of Union Land, that we were able to rebut the over optimistic forecasts of the landlord’s surveyor.”
The 2018 Supreme Court ruling altered the interpretation of the Landlord and Tenant Act 1954.
The 1954 act allows a landlord to oppose the grant of a new tenancy where it intends to redevelop the property. However in the 2018 case it was determined that a new lease should be granted (to S Franses) despite the landlords future plans.
The dealership is now undertaking a refurbishment of the gallery which is currently open by appointment only. It will reopen fully next year once the works are complete.