What happens if the developer does not make a profit on the lease?
The short answer is nothing that will effect the school. The school trust signs a long lease to occupy the educentre, effectively in perpetuity, according to the terms of the lease. It does not matter to the school who owns the lease. The ownership of the lease will operate as any normal lease. In the event of the bankruptcy of the lessor or a stratgeic decision to pull out, the lease would be sold by the lessor or liquidator to a new lessor who would be legally bound to comply with the terms of the lease. The fact that the lessor has invested 26m in the facility means that if they were to decide to withdraw, the sale price of the lease would have to reflect the rental income being achieved. If the rental did not justify a price of 26m, then the lessor would have to sell at a discount, in the same way as any other property development.
