EMA resolves dispute over pricey Canary Wharf tenancy
Pharmaphorum | July 05, 2019
After months of wrangling, the EMA finally has a solution to the £500 million financial liability it has faced over the tenancy to its former home in Canary Wharf. The EU regulator – now based in temporary accommodation in Amsterdam – has sub-let the entire 284,704 square feet (26,450 m2)accommodation at 30 Churchill Place to WeWork, a fast-growing shared office-space group. As a result of the deal, the EMA has also now settled its litigation with the Canary Wharf Group. Faced with the prospect of the UK leaving the EU, the EMA opted to move from London to Amsterdam earlier this year. It argued that the Brexit referendum had effectively ‘frustrated’ its lease, making a move away from the UK imperative, and that also meant it should be able to exit the agreement – which expires in 2039 – without prejudice. Canary Wharf, which is owned by Canada’s Brookfield and the Qatar Investment Authority, viewed the situation very differently. In a landmark case for the commercial property sector, it succeeded in arguing in the High Court in February that Brexit was not a sufficient reason to break the lease terms, which involved annual payments of around £17 million in return for 10 floors that could house up to 900 staff. The EMA had appealed the decision, but now that it has a sub-tenant lined up has confirmed that it will withdraw the appeal, accepting that the original High Court ruling would stand. WeWork is due to take over the space in December after a refit. The resolution of the dispute is a massive weight off the shoulders of the EMA, which is still coping with the disruption caused by the relocation and has had to strip back its operations to focus on critical regulatory areas.