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.
The UK government has won planning permission to develop a new headquarters at the University of Reading for the European Centre for Medium-Range Weather Forecasts.
Construction of ECMWF’s headquarters is scheduled to start toward the end of 2024, with completion anticipated by autumn 2026, following Wokingham Borough Council’s approval of the development at its February planning meeting.
The ECMWF is already headquartered in Reading, and the Government Property Agency’s delivery partners, AtkinsRéalis and Mace Group, will build the new facility. It will house up to 300 scientists and staff working on weather prediction, forecast production and climate change research.
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McLaren Construction has signed a £132M contract to redevelop and refurbish the former House of Fraser store on Oxford Street in London.
A wide-ranging programme of repair and refurbishment works at the art deco building will create a circa 366K SF mixed-use development including retail, office, leisure, and food and beverage components. McLaren has also been charged with repairing the damaged Portland stone facade, completing the Chapel Place facade and reinstating a number of original features.
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Balfour Beatty has commenced on-site work for a 1,900-bed student accommodation scheme for Sussex University following delivery of the East Slope Residences project on the campus in 2020. The new West Slope Residences is the next stage of the university’s modernisation plan at its Falmer, Brighton, campus.
Based on a 54-year design, build, finance and maintain agreement, Balfour Beatty Investments will invest £32M for 81% of the project equity, and the university is co-investor for the remaining 19% equity. Balfour Beatty Investments has also provided £171M of bond financing through a private placement.
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Logicor has completed a 112K SF extension for retailer B&M, with the enlarged 455K SF distribution centre in Runcorn now including new yards, new loading facilities and an additional 32 heavy goods vehicle parking spaces.
Logicor said it achieved a 10% improvement in the site’s total emission rate, with LED lighting installed with occupancy sensors and daylight controls, plus electric vehicle charging points across the site.
LEASING
Grosvenor’s London retail, residential and office portfolio vacancy rates fell to 4.3% by year-end 2023, according to the company’s latest update.
Available space across retail properties was 4.9% at the end of 2023, while its office vacancy was 3.8%. Grosvenor said it signed leases with 69 new retail, leisure and office occupiers covering 219K SF during the year, representing £22.8M of rental income.
Several development projects completed during 2023, including over-station development 65 Davies Street, Mayfair; the redevelopment of the 1980s office building Holbein Gardens, near Sloane Square; and The Ice Factory, formerly a five-storey warehouse converted to workspace, commercial space and a rooftop restaurant and bar.
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Freedom Works has signed a 15-year turnover lease with Brighton & Hove City Council for 16,300 SF of offices at Bartholomew House, Brighton, which becomes the tenth site for the business.
The project will involve repurposing two floors into 40 offices designed for teams from two to 70 staff, plus hot desk coworking and space for the council to deliver its own services. The site is due to open in February.
“We’ll continue to deliver our partnership of delivering business support through relationships like Barclays Eagle Labs, into the Brighton site, providing a supportive environment for our members,” Freedom Works Founder and Managing Director John Trigg said in a statement.
Hewn represented Freedom Works, while Avison Young acted for Brighton & Hove City Council.
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Figma has taken circa 15K SF of office space at Devonshire Square, near Liverpool Street.
The San Francisco-based tech specialist is relocating from its Soho base and is doubling its office space for its 130 staff, with the offices at DSQ becoming Figma’s European headquarters and the company’s largest hub outside the U.S.
Figma has moved into a Grade A office within a Grade II-listed former warehouse at DSQ’s Building 9. The total DSQ complex consists of 580K SF of office space that is 80% let.
“This deal with Figma is indicative of the City’s evolving profile amongst a broader mix of businesses,” Devonshire Square Director of Offices Andy Booth said in a statement.
DEBT
Investec Real Estate has provided a £13.7M investment refinancing loan to Commercial Estates Group secured against the latter’s recently completed 1000 Aztec West office building in Bristol.
Completed in December, the 73K SF BREEAM Excellent and EPC A rating offices include a 1K SF gym and wellness facility, and it is the south-west’s first net-zero-carbon out-of-town office development, according to Investec.
The Aztec West business park also includes a four-star hotel, restaurant and café.
SALES
Warehouse REIT has divested two assets in separate transactions for a total of £13.4M. The combined price is 3.7% ahead of the September 2023 book value and reflects an average net initial yield of 5.3%, the company said.
The sales were at Warrington South Industrial Estate, a 106K SF single-let asset acquired in 2019 and sold for £11.6M, plus the 20K SF multi-let Pellon Lane asset in Halifax, which was acquired in 2017 and sold for £1.8M.
These two transactions bring total sales since 1 April to £53M. Proceeds from the sales are to be used to pay down debt, Warehouse REIT said.
“Strengthening our balance sheet and earnings position by releasing capital from assets which are low yielding or where we have successfully executed our business plan is a key priority for us,” Warehouse REIT co-Managing Director Simon Hope said in a statement.
PLANNING
Football club Oxford United has revealed plans to build the first UK stadium to be all-electric. It has proposed a 16,000-seat facility on a Kidlington site 5 miles to the north of the city centre after Oxfordshire County Council’s cabinet gave leasing consent.
The stadium will also include a 180-bed hotel, restaurant, conference centre, health and well-being space, and a community plaza, while the development will be powered by over 32K SF of roof-mounted solar panels, supported by air-source heat pumps.
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Developer Henley Investment Management has achieved planning consent to redevelop the Albert and Swedish Wharf in Fulham, south-west London, to include logistics and residential elements.
The 2-acre site on the north side of the Thames adjacent to Wandsworth Bridge will be redeveloped as a 55K SF logistics facility, and the planning application also included a new jetty to increase waterborne cargo capacity for transportation.
In addition, a total of 276 apartments will be built on the site, ranging from six to 17 storeys.
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British Land and AustralianSuper have submitted a reserved matters planning application to reestablish a permanent cultural venue at Printworks, part of the partners’ Canada Water development.
Through a six-year temporary consent, Printworks London has until recently been operated by electronic music and arts specialist Broadwick but closed to the public last year.
British Land and AustralianSuper said they were in discussions with Broadwick to operate the proposed new venue, which will include leisure and culture facilities within half of the existing building, while the other half will be redeveloped for workspace and retail and will be called The Grand Press.
Four key new cultural spaces are planned for the new Printworks, which is scheduled to reopen in 2026.
PEOPLE
Mark Russell has been appointed to the newly created role of head of fund management (real estate) at Federated Hermes as it expands its real estate team.
Russell will be based in London, reporting to Head of Real Estate Chris Taylor, and will be charged with strategy and performance development within the Federated Hermes Private Markets real estate business, the company said.
Russell has experience in private practice advisory, institutional real estate fund management and property company advisory over a 25-year career and has joined Federated Hermes from Orchard Street IM where he was a partner managing core and core-plus funds.
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Newmark Group has appointed Matthew Featherstone as its new head of debt and structured finance for Newmark UK and Europe.
Featherstone will work with Newmark’s UK and EMEA Capital Markets teams, having joined from CBRE where he was executive director, debt and structured finance.
