UBS has admitted it partly erred in calculating Exemplar’s fee for the refurbishment of City development Milton Gate, but is defending the majority of its claim.
Its Triton Property Fund is being sued by Exemplar over the £1.8m fee it was paid for refurbishing the 200,000 sq ft building. Exemplar claimed UBS had incorrectly calculated the fee which could be as large as £5m.
UBS admitted in a defence filed at the High Court that it should not have deducted £1.9m from the value of the property. Exemplar said it believed to be a notional sum for vendors costs which would be incurred on a potential sale of the property.
The reduction by £1.9m marginally reduced the figure from which Exemplar’s fee was calculated from £124.8.m to £122.9m.
However, UBS, represented by law firm Mischcon de Reya, denied any other errors in the calculation of the fee to be paid.
Exemplar complained in its claim form that UBS’s valuation incorrectly did not take into account a 4,233 sq ft reception and made deductions in relation to a fifth floor which was sublet to a UBS subsidiary.
Exemplar also claimed that UBS should not have removed the cost of buying and selling St Paul’s House at Warwick Lane from the value.
UBS bought St Paul’s House as a part of a deal which facilitated law firm Addleshaw Goddard leasing the whole of Milton Gate.
UBS bought the property for £14.1m and then sold it for £10m. It deducted the £4.1m loss from the figure on which it based Exemplar’s fee. UBS argues it was entitled to do this because it is necessary expenditure to ensure Addleshaw Goddard moved to the building, which in turn increased its value.
However Exemplar argues that, because the deal meant UBS got £400,000 a year above estimated rental value at Milton Gate as a consequence of the St Paul's deal, the cost incurred should not impact on its fee.