London’s Big New Office Schemes Lack One Thing: Tenants
The 10 largest office buildings scheduled for completion in London this year have almost 3M SF of empty space to fill, analysis from Bisnow shows.
Data from Deloitte’s biannual London Crane Survey, analysed by Bisnow, highlights the tough market into which large new office buildings are being delivered, as occupiers tread cautiously on new lettings while they work out their post-Covid office needs.
Of the 10 largest schemes, seven have no tenants lined up at all ahead of completion. And of the combined 3.4M SF of office space being built, just 505K SF is pre-leased, with 2.8M SF unlet.
Here’s a breakdown of the big beasts looking for tenants.
8 Bishopsgate
The £300M 8 Bishopsgate in the City of London is one of the largest speculative developments to have been undertaken in London in recent years, at 770K SF. Owned by Mitsubishi Estate and being developed by Stanhope, the 50-storey tower describes itself as being the most sustainable speculative tower in UK history, but it currently has no tenants ahead of a Q4 completion date.
YY London
When Cindat Capital teamed up with Oaktree Capital to buy 30 South Colonnade in Canary Wharf in 2019, it picked up one of the few distressed London office deals of the past five years. The duo appointed Quadrant Estates as development manager to oversee a refurbishment that will create 408K SF of office space following the departure of Reuters, which moved out in 2019. So far, the space remains unlet ahead of a proposed Q4 completion date.
80 Strand
More commonly known as Shell Mex House, named after previous occupier Shell, a comprehensive refurbishment of 80 Strand in the West End is scheduled for completion in the first quarter of 2022. One tenant has signed for 40K SF at the 384K refurbishment, video game developer Sharkmob, with discussions with other tenants ongoing.
Paddington Square
With a construction cost of more than £350M, Paddington Square — nicknamed "the cube" — is one of the most expensive schemes completing this year. It is being undertaken by Sellar on behalf of Singaporean owners, and it was designed by Renzo Piano. It stands out on this list as it actually has some tenants lined up: Retailer Kingfisher has agreed to lease 25K SF at the scheme, CoStar reported, and financial services firm Capital Group is in talks to take another 250K SF.
Christchurch Court
Christchurch Court in the City is one of four buildings that became vacant when Goldman Sachs located to a new London HQ in 2019. Bought by Hong Kong-based billionaire Hui Wing Mau for £270M in 2015, a refurbishment is scheduled for completion in Q2 this year, with no tenants so far found for the 303K SF scheme.
Gateway Central Building
Gateway Central is part of the huge White City Place scheme being built in the White City area of west London by Mitsui Fudosan, Cadillac Fairview, AIMCo and Stanhope. Five of the 10 floors at the 285K SF scheme have been pre-leased by L’Oreal for a new UK HQ, leaving 130K SF available.
Arbor
Arbor is the first building being built as part of Native Land’s £2.5B Bankside Yards scheme, on the Southbank of the Thames. The mixed-use scheme will see offices formerly occupied by IBM and Property Week-owner UBM demolished to make way for a new 1.4M SF scheme, including offices, residential and retail. The 225K SF Western Yards building has no tenants so far.
33 Charterhouse Street
33 Charterhouse Street is a new 201K SF scheme in Farringdon being developed by Helical and Ashby Capital. It secured a £140M development loan from Allianz in 2020, but it has yet to secure any tenants.
Warwick Court
A second Goldman-occupied City of London office finds a place on this list, the 180K SF Warwick Court. Owner Mitsubishi Estate is refurbishing the scheme, and it has found one tenant so far, with financial firm T Rowe Price agreeing to take 140K SF.
Norfolk House
Norfolk House at 31 St James’s Square has had some pretty famous tenants through its history, principally Gen. Dwight D. Eisenhower, who used the building as the Supreme Headquarters of the Allied Expeditionary Force for part of World War II. A private investor bought that 1930s building and is knocking it down to create a 165K SF new-build scheme, which currently has no tenants at all, famous or otherwise.
