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Derwent London has secured a
133,600 sq ft pre-let (41%) at its
380,000 sq ft headquarters Fitzrovia
development, 80 Charlotte Street,
to engineering firm Arup. Arup has
agreed to a 20 year lease of the lower
floors at a headline office rent of £75
per sq ft.
The deal also saw Derwent
London agree to a conditional put
and call option to sell 8 Fitzroy
Street to Arup, who already occupy
the building which sits opposite 80
Charlotte Street, for £197 million.
Simultaneously Arup has agreed to
vacate 13-17 Fitzroy Street which they
owner occupy, selling the freehold to
Workspace Group for £98.5 million.
This sequence of transactions is a rare
example of not two but three parties’
interests aligning in the congested
central London property market.
CC Land, the investment vehicle of
Chinese property magnate Cheung
Chung-Kui, have completed on their
purchase of The Leadenhall Building
for a record City price tag of £1.15
bn. This equates to a capital value of
£1,893 per sq ft for this iconic piece
of London’s skyline.
Following British Land’s decision
to market their 50% stake in The
Leadenhall Building in December
2016, the deal subsequently evolved
with Oxford Properties agreeing to
put the remaining 50% on the table.
Since then, Canary Wharf Group has
begun marketing a 50% stake in 20
Fenchurch Street (‘The Walkie Talkie’)
with a number of Asian investors
reportedly looking at a potential
purchase. Aside from the obvious
prominence and quality of these two
assets, a weakened pound following
the vote for Brexit in June 2016 is
acting as a significant catalyst for
change in the market for London’s
skyscrapers.
Slovakian developer HB Reavis has
had a busy start to 2017, exchanging
contracts to buy Elizabeth House
in Waterloo, and reportedly putting
two further development sites under
offer: 120 Moorgate in the City core
and Cardinal Tower in Farringdon.
Collectively this equates to a
consented pipeline of around
1.25 million sq ft.
Elizabeth House is by some
way the largest at 945,085 sq ft,
comprising 740,630 sq ft of office
space, 142 residential units and
12,422 sq ft of retail across two
buildings. JV partners Chelsfield and
London + Regional gained planning
consent for the major mixed use
scheme in July 2015, and has now
exited its position for a reported
price of in excess of £250 million.
HB Reavis has reportedly
agreed to pay close to £50 million
for 120 Moorgate, a 130,000 sq ft
consented office scheme currently
owned by Redevco. Pricing is not
yet reported on Cardinal Lysander’s
12-14 Farringdon Road site, but this
will comprise a further 200,000 sq ft
office scheme. Both developments are
extremely well positioned to benefit
from the delivery of Crossrail in 2018.
ROUND-UP
Sam Harper,
Senior Surveyor,
rounds up the top
news stories of the
past quarter
The Cheesegrater goes for
Record City Price Tag
HB Reavis Hoovers up
London Pipeline
London at
a Glance
Derwent, Arup and
Workspace tie up Tripartite
Fitzrovia Deal
Orchestrating logistics across London,
in the face of ever-increasing demand
for deliveries, is one of the key issues
facing our capital. Along with the
well-documented rise of online retail
– which has largely accounted for the
growth in urban industrial demand,
there has been a steady decline in the
supply of available land owing to the
value arbitrage in relation to alternative
uses. This is leading the industry to
look for creative solutions, the latest
of which is multi-storey sheds.
The concept is not entirely new,
with plenty of successful examples
in Asian cities, as well as Segro’s
(formerly Brixton’s) 234,000 sq ft
X2 scheme in Heathrow which was
arguably delivered ahead of its time
in 2008. In recent months however
there has been renewed push, with
Segro launching a paper titled ‘Keep
London Working’ and multi-storey
industrial specialists Compagnie Du
Parc (CdP) announcing plans to invest
£80 million over the next 12 months,
principally in Greater London.
Multi-Storey Sheds
CUSHMAN & WAKEFIELD
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ROUND-UP