The global professional services firm has agreed to extend its lease terms on the building by five years, taking it to 2027.
Ediston Property has announced that it has restructured its lease terms with Ernst & Young (EY) at Newcastle’s Citygate II development.
EY occupy 41,935 sq ft across five floors, on five leases which expire in March 2022.
The company has signed an agreement with them to vary their leases to give an expiry date of 31 December 2027, in exchange for an incentive equivalent to 22 months' rent free.
The annual passing rent on these five floors has increased by 20% as a result of the transaction, and EY will be undertaking a refurbishment of their accommodation.
Citygate II was acquired by the company in January 2016 and extends to 63,524 sq ft with 70 car parking spaces. It is multi-let to three tenants, UNW, N+D (London) Limited, guaranteed by Grainger plc, and EY.
Calum Bruce, director of investment at Ediston Properties Limited, the company's investment manager, said: "Securing EY until the end of 2027 not only improves the income stream of the company but is also expected to increase the capital value of the asset.
“We have worked closely with our tenant to give them the lease structure which best suits their requirements."
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