British Land is teaming up with Canada’s Oxford Properties to develop the Leadenhall Building in the City financial district, the second crisis-hit skyscraper project to be revived within a week.
Britain’s second-largest property company yesterday said it had agreed terms to build the 47-storey scheme in a 50:50 joint venture with the real estate arm of the OMERS Worldwide Group of Companies, one of Canada’s largest pension plans.
The cost of developing the property, known as “the Cheesegrater” for its distinctive tapering shape, is estimated at £340m.
Last week, British Land’s biggest rival Land Securities announced it would resume construction work on a 37-storey building known as the “Walkie Talkie” at nearby 20 Fenchurch Street after striking a similar tie-up with Canary Wharf Group.
The Leadenhall Building is expected to inject 610,000 square feet of space into London’s supply-starved office market, while the Land Securities £500m project will add around 690,000 square feet of commercial space. Both schemes are due to complete in the second quarter of 2014 after long delays caused by a shortage of debt and the collapse in demand for prime offices following savage job cuts in Britain’s financial sector.
After securing the equity funding necessary to trim the risks of their development plans, British Land and Land Securities will be competing directly to find tenants for their properties at the highest possible rents on the longest terms.
The designs of both schemes offer floorplates of various sizes, allowing the companies to tap the widest possible market for tenants, with smaller floors aimed at growing or recovering businesses and the larger floors aimed at large multinational corporations.
City A.M. Reporter