This Week's London Deal Sheet
The Deal Sheet is a weekly compilation of Greater London and beyond's biggest leases, sales, financing deals, construction updates and personnel moves. Have news you’d like to submit? Email mark.faithfull@bisnow.com.
Banking giant HSBC is to move its world headquarters from its 45-storey Canary Wharf tower back to the City of London.
The financial business has confirmed that it will move out of 8 Canada Square by 2027 when its lease expires. The move after two decades at the location is part of HSBC’s plans to downsize its office space, as the bank said it is now committed to flexible working.
HSBC is negotiating a new lease on British Telecommunications' former headquarters in the Panorama St. Paul's development, which will be much smaller than the bank's current headquarters, which houses about 8,000 staff. The Panorama building is owned by Orion Capital.
HSBC said the new development "is being designed to promote wellbeing and constructed to best-in-class sustainability standards, using predominantly repurposed materials."
HSBC moved to Canary Wharf in 2002, having previously been based at sites in the City of London.
LEASING
Landsec has pre-let an additional 50K SF of office space at Lucent, its scheme directly behind London’s Piccadilly Lights, bringing the building to 77% pre-let ahead of completion later this summer.
A St. James’s-based international hedge fund is the latest company to commit to Lucent and has signed for two floors, almost doubling the size of its current UK headquarters.
This latest agreement follows Landsec’s recent annual results, in which it announced that it had £48M of lettings signed or in solicitors’ hands as of March 2023, with deals 5% ahead of valuers’ assumptions, Landsec said.
Once complete, Lucent will provide 121K SF of prime office space across six floors and will host two of Landsec’s office products: Blank Canvas and Myo, Landsec’s flexible office brand. The scheme will also offer 20K SF of new retail and leisure space.
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Aviva Investors has completed a major pre-let at its One Liverpool Street development in London. The letting has been agreed with Dentons, the largest global law firm.
Developed for completion in January 2026, One Liverpool Street will provide 176K SF of leasable office and retail space spread across the ground and upper 10 floors.
Dentons will take 67.6K SF in the building on an initial term of 15 years and expects to move into the building by mid-2026.
One Liverpool Street is being developed to target a BREEAM Outstanding rating, and the building will be 100% electric with no gas boilers and will include nearly 300 cycle spaces.
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Premium luggage manufacturer and retailer Samsonite is to open a new UK flagship on Oxford Street.
Knight Frank, acting for a private landlord, secured the retailer for a previously vacant unit at 285 Oxford Street, which is close to the intersection with Regent Street, with John Lewis located diagonally opposite.
Samsonite has agreed to a five-year lease for the unit, which comprises 4,700 SF across four floors, with the ground and first floors to be used as retail space, including a repairs studio, personalisation area and heritage wall outlining the brand’s history since 1910. The store will open in the third quarter.
DEALS
CLS Holdings has unconditionally exchanged or completed on three property disposals across the UK and Sweden.
The London-based commercial property investor completed the disposals for a total of £49M, excluding costs, at an average of 7.5% above their 31 December valuations.
The firm has unconditionally exchanged contracts to sell Westminster Tower, Albert Embankment, in London to Australian developer Third.i Group. The transaction is expected to complete in September 2023.
The property has planning permission for a residential redevelopment of the existing building, including the construction of three additional floors, with views overlooking the River Thames and Westminster.
CLS has also completed the sale of a smaller office property, St. Cloud Gate in Maidenhead and a legacy land holding outside Helsingborg in Sweden with planning permission for logistics.
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NewRiver and Luxembourg-based investment company Bravo have completed the disposals of the remaining retail parks in the Napier joint venture to RI UK 1 for a total of £62.6M.
The disposals of Kittybrewster Retail Park in Aberdeen and Glendoe and Telford retail parks in Inverness bring the total sale receipts from the JV to £76M, 26% higher than the purchase price of £60.5M when NewRiver and Bravo acquired the properties in June 2019.
The three assets generated a net rental income of £5.7M during the 2023 financial year and had a gross asset value of £64.4M as of 31 March, NewRiver said.
The real estate investment trust will use the sale proceeds to reduce its net debt by £31.8M to £169.5M.
FINANCE
Cain International has agreed to the renewal of a £50M revolving credit facility with Tungsten Properties for a further three years. The renewal follows the deployment of the initial facility of £36M in 2020.
Cain’s partnership with Tungsten began in 2019 with the initial facility financing four schemes with a gross development value of approximately £61M.
Coupled with Tungsten’s balance sheet, the first facility supported the development schemes across the UK at Witham, Witney, Oakham and Lutterworth, which totalled more than 440K SF of industrial and distribution space. The new facility will fund a pipeline of logistics opportunities across the UK.
The credit facility transaction has been agreed upon as part of Cain’s Fortwell strategy after Cain’s acquisition of Fortwell Capital in 2020, which extended Cain’s lending platform’s offering to development loans ranging between £10M and £50M across residential, commercial and alternative sectors in the UK.
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OakNorth Bank has provided a £15M loan to compact luxury hotel chain Z Hotels to refinance an existing loan and support its growth plans.
Z Hotels launched its accommodation model in London with the opening of Z Soho in 2011. Since then, the hotel chain has grown to 14 operational sites, including 11 in London and one each in Liverpool, Bath and Glasgow, offering 1,710 bedrooms.
The latest facility from OakNorth will also be used to refinance its current loan facilities and fund the construction of an additional 20 rooms at its Piccadilly location, taking its total number of rooms to 132, in addition to being used to develop new lift facilities and a new ground-floor café.
DEVELOPMENT
Chancerygate has achieved practical completion on six new Grade A urban logistics developments totalling 687K SF that have a combined gross development value of £115M.
The schemes are located in Knutsford and Congleton in Cheshire; Wigston, near Leicester; Brackley, South Northants; Witham, Essex; and Bournemouth.
“We currently have more than 2.65M SF of urban logistics space under construction or ready for development across 19 sites ranging from Edinburgh to Chichester,” Chancerygate Managing Director Richard Bains said in a statement. “In addition, we are actively looking for further development opportunities throughout the UK.”
PEOPLE
Real estate adviser CBRE has bolstered its capital markets team with the appointment of Brendon Frye, who will join as a senior director and will be responsible for coordinating international capital from across the globe into all real estate sectors across the UK.
He will report to Chris Brett, head of capital markets, Europe, and James O’Neill, head of equity placement, working across CBRE’s capital markets division.
Frye has rejoined CBRE from Eastdil, where he was a senior vice president. Prior to that, he was a director in CBRE’s international capital markets team, focusing on Asian capital.
