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Amazon facing eviction threat at Gourock centre | |
(32 minutes later) | |
Amazon has said it will fight a court's decision to uphold an eviction notice from its landlord at a distribution warehouse in Inverclyde. | Amazon has said it will fight a court's decision to uphold an eviction notice from its landlord at a distribution warehouse in Inverclyde. |
The site is owned by the M7 property investment firm which gave the online giant six months' notice to quit in February. | The site is owned by the M7 property investment firm which gave the online giant six months' notice to quit in February. |
Amazon challenged the move at the Court of Session, arguing it was entitled to a year's notice. | Amazon challenged the move at the Court of Session, arguing it was entitled to a year's notice. |
But the courts backed M7, though the US firm has said it will appeal again. | But the courts backed M7, though the US firm has said it will appeal again. |
About 300 people work at the Gourock site and Amazon says it remains "business as usual" for them and customers. | About 300 people work at the Gourock site and Amazon says it remains "business as usual" for them and customers. |
Insiders have told BBC Scotland the court battle is a high-stakes negotiation on rent. | Insiders have told BBC Scotland the court battle is a high-stakes negotiation on rent. |
Amazon operated its "fulfilment centre'" with a 15-year lease running out in August this year. | Amazon operated its "fulfilment centre'" with a 15-year lease running out in August this year. |
It was previously owned by Scottish Enterprise, the government agency, and it is claimed the rent is as much as 60% below the market rate. | It was previously owned by Scottish Enterprise, the government agency, and it is claimed the rent is as much as 60% below the market rate. |
Last February, the current owner M7 Real Estate gave Amazon six months' notice to quit. | Last February, the current owner M7 Real Estate gave Amazon six months' notice to quit. |
Amazon responded that it was entitled to a year's notice. | Amazon responded that it was entitled to a year's notice. |
Taking its case to the Court of Session, Amazon lost with a ruling that the six-month notice period was fair and legal. | Taking its case to the Court of Session, Amazon lost with a ruling that the six-month notice period was fair and legal. |
M7 is seeking not only to evict Amazon but it also wants damages from the retailer for remaining on the site since August. | M7 is seeking not only to evict Amazon but it also wants damages from the retailer for remaining on the site since August. |
However, that issue has been postponed to a future sitting of the Court of Session. | However, that issue has been postponed to a future sitting of the Court of Session. |
Behind the eviction notice and court action is a highly unusual rent negotiation. | Behind the eviction notice and court action is a highly unusual rent negotiation. |
London-based M7 Real Estate owns 800 industrial assets in 13 countries on behalf of its investors, with a fund worth more than £4bn. | London-based M7 Real Estate owns 800 industrial assets in 13 countries on behalf of its investors, with a fund worth more than £4bn. |
It believes its action was the only way to get Amazon to respond to its demand for a rent increase, and those discussions are now under way. | It believes its action was the only way to get Amazon to respond to its demand for a rent increase, and those discussions are now under way. |
'Business as usual' | 'Business as usual' |
Retail chains have been putting immense pressure on commercial landlords to lower rents. Although Amazon relies on a different type of commercial property, it is known for its muscular use of bargaining power. | Retail chains have been putting immense pressure on commercial landlords to lower rents. Although Amazon relies on a different type of commercial property, it is known for its muscular use of bargaining power. |
But the property investor is warning that there are no other similar sites in central Scotland to which Amazon could move at short notice. | But the property investor is warning that there are no other similar sites in central Scotland to which Amazon could move at short notice. |
In other words, M7 also has leverage in these negotiations. | In other words, M7 also has leverage in these negotiations. |
An Amazon spokeswoman said: "It's business as usual for our customers and associates and we will be appealing the court decision." | An Amazon spokeswoman said: "It's business as usual for our customers and associates and we will be appealing the court decision." |
John Murnaghan, head of UK and Ireland real estate for M7, said: "We're here to engage constructively and proactively with Amazon over this lease. However, we need to ensure we're getting fair value for our investors." | John Murnaghan, head of UK and Ireland real estate for M7, said: "We're here to engage constructively and proactively with Amazon over this lease. However, we need to ensure we're getting fair value for our investors." |