British Land lets a third of Cheesegrater

BRITISH Land has pre-let a third of its Cheesegrater skyscraper to insurance company Aon, giving it a head-start in the race to secure tenants before a glut of new office space comes to market in 2014.

The US-based insurer is leasing the 10 lower floors in the 47-storey Leadenhall Building, equivalent to 191,000 sq ft out of a total of 610,000 sq ft, and has an option of a further five floors. It will move in when the building is completed in 2014.

Industry sources said that Aon was paying around £55 per sq ft and some suggested British Land and venture partner Oxford Properties had been hoping for a higher rate. British Land’s shares dipped slightly, closing down 2p at 582.5p

But some analysts think predictions of City rents as high as £70 or £80 per sq ft are wide of the mark and said the property developers had done well to sign a tenant at this stage in the building’s development.

John Cahill, an analyst at Evolution Securities, said: “There’s an awful lot of supply coming on to the market at the moment, and I’m not convinced there is huge demand. Some talk of rents around £70 per sq ft but I don’t see it happening.”


The Cheesegrater

Developer: British Land and Oxford Properties
Completed: Due 2014
Has done remarkably well to pre-let space to Aon at this stage, although some analysts think it could have got more than £55 per sq ft if it had waited a little longer.

The Shard

Developer: Sellar
Completed: Due May 2012
With around a year to go until completion, the Shard still hasn’t pre-let any office space. But the developers won’t have any trouble drumming up interest in such an iconic building.

Heron Tower

Developer: Heron
Completed: March 2011
Has pre-let around 20 per cent of its office space, with industry sources suggesting it has secured an rate of £55 per sq ft. Will be glad to have completed before Pinnacle and Walkie Talkie.

Walkie Talkie

Developer: Land Securities and Canary Wharf
Completed: Due 2014
Another building that will come to market in 2014, the developers will surely be smarting after losing out on the Aon deal to arch rival British Land.


Developer: Arab Investments
Completed: Due 2014
Hasn’t found a tenant, which means it has to go back to its investors for extra funds to continue construction. Will face stiff competition from the Cheesegrater and Walkie-Talkie.

The Walbrook

Developer: Minerva
Completed: February 2010
Having stood empty for over a year now, the Walbrook is definitely the laggard of the bunch. We’ve heard that its insistence that tenants take on a 15 year lease, which the banks are asking for, is putting prospective companies off.