Apple Takes Space At What Will Become London’s Most Valuable Building Ever

Tech giant Apple has agreed to increase the amount of space it will lease at 22 Bishopsgate in the City of London, as the giant building edges toward full occupancy and the title of the most valuable office property in the history of London.

Apple was already leasing two floors at the 1.3M SF 22 Bishopsgate, and has agreed to lease a further three, The Times reported. The extra 75K SF would take its occupancy close to 125K SF. 

U.S. investment bank William Blair has also agreed to lease 66K SF, EG reported, and the building now has at least 850K SF of office space let out — more than two-thirds of the building, which has about 150K SF of amenity space. 

Rents in the building are around £70-£75 per square foot, Savills said in a note on the City office market. That means that a fully leased building would likely generate at least £80M a year in rent. Capitalised at a yield of 4%, the level at which the best buildings in the City are trading, that would put the capital value of 22 Bishopsgate at a minimum of £2B. 

The leasing success and valuation of the building is a vindication for its owners, AXA Investment Managers - Real Assets, Singaporean fund Temasek and Canadian investors PSP and QuadReal. 

They bought the development site and pushed the button in 2015 after construction of the building had essentially stalled for eight years. The development, which will cost £1.3B to complete, on a speculative basis, came in the immediate aftermath of the Brexit vote, amid dire predictions about the future of the London office market.

The previous record sale price for a London office building is the £1.3B that Hong Kong investor Lee Kum Kee paid for the 687K SF Walkie Talkie building in 2017.