11 / 36
In North London, Hammerson Plc
and Standard Life Investments have
revealed plans this quarter for a
£1.4 billion (1 million sq ft) retail and
leisure extension to Brent Cross
London. In Croydon to the south,
Hammerson Plc and Westfield have
recently submitted an enhanced
proposal to deliver another £1.4 billion
development (1.5 million sq ft) of retail
and leisure. In the west, Westfield
are pursuing a £1 billion extension to
Westfield London that will provide
an additional 740,000 sq ft of space.
And in the east, Westfield’s Stratford
City goes from strength to strength
with 42 million footfall in 2015 and
significant rental growth.
This £3.8 billion pipeline will
ensure each quadrant of London
has the benefit of a world class
shopping and leisure hub to support
a population that the Mayor expects
to reach 10.89 million by 2041. The
remaining challenge for developers is
how to future-proof these schemes
against continual technological
advancements and disruptions.
Hong Kong investor Kingboard has
bought the freehold interest in Moor
Place, EC2, for £271 million reflecting
a NIY of 4.86% and a capital value of
£1,144 per sq ft. The 236,793 sq ft City
office building is the European HQ of
WeWork, with 73% of the space let to
the co-working behemoth until 2035.
This is only the second time
WeWork’s covenant has traded and
the first of this scale. This follows
Corpus Sireo’s purchase of a 10%
geared leasehold interest in 33 Queen
Street, EC2 where WeWork occupy
37,300 sq ft, in May for £40 million
reflecting 5.00% NIY for a new 20
year lease. Investors are starting to
accept co-working covenants which,
despite as a sector accounting for
10% of London take up in 2015, have
been treated with a degree of caution
owing to a lack of clarity surrounding
operators’ financials.
Tech giant Apple has signed a deal
to take c. 500,000 sq ft of office
space at the heart of Battersea
Power Station. This represents a
commitment to 40% of the office
space within the iconic Grade II* listed
former boiler house, and will make it
one of Apple’s largest bases outside
of the US. The new Apple campus will
house around 1,400 employees from
existing sites across the capital when
it opens in 2021.
This is positive news for the
consortium of Malaysian investors
who have been driving the £8 billion
regeneration project since purchasing
the site out of receivership for £400
million in 2012. This transaction, along
with the extension of the Northern
Line to Battersea which is due to
open by 2020, should act as the
catalyst required to redefine this new
London submarket, in the same way
that Google is widely credited with
doing at King’s Cross.
Moor Place, EC2
ROUND-UP
Sam Harper,
Surveyor,
rounds up the top
news stories of the
past quarter
Co-working Covenant
Makes the Grade
Apple Plants Flag in
the Sand at Battersea
London at
a Glance
Development Aims High
All Points Covered on
the Retail Compass
Sadiq Khan has appointed US
comedian Amy Lang as London’s
‘night tsar’. She is tasked with the
protection of London’s night life
economy, which is worth £26 billion
a year, representing around eight
per cent of London’s economy and
supporting one in eight jobs. Since
her appointment in November, Amy
has already played a central role in
the high profile reopening of the
iconic Fabric nightclub in Clerkenwell,
following its closure in September.
This is being heralded as a major
win amidst the reported decline
of London’s wider cultural scene,
including the closure of 35% of
grassroots music venues since 2007.
The Mayor’s appointment of a night
tsar recognises increasing pressure
on cultural uses from higher value
alternatives such as office and
residential. It seems logical that
such intervention will go to protect
developers in the long run, as it
preserves the cultural variety that has
been integral to London’s ability to
attract the top talent and its success
as a global city.
Protecting London’s Fabric
In a post Brexit boost to London, AXA
Investment Management / Lipton
Rogers have pledged to go ahead with
the 1.4 million sq ft 22 Bishopsgate. In
the weeks before the referendum AXA
had stated that they would review the
largest development in the City if the
vote was to leave the EU. The decision
to build is a sign of confidence in the
longer term prospects for the City, and
follows on from the successful leasing
performance of Leadenhall Building
(100% let), 20 Fenchurch Street (100%
let), 100 Bishopsgate (50% prelet) let
and the Scalpel (35% prelet).
The 22 Bishopsgate design
replaced the previous Pinnacle
scheme, for which construction began
in 2008 before being suspended in
2012 due to the economic downturn.
The foundations and groundworks are
largely complete which will allow for an
accelerated construction timetable with
a completion date targeted for 2019.
CUSHMAN & WAKEFIELD
11
ROUND UP