Transport with regard to London will abandon its plans to move into the Shard at London Bridge ~wards a deal that allows the skyscraper’s owners to find tenants willing to pay a much higher rent.
The sale of the lease to London Bridge Quarter, the landlord that is a joint venture between the State of Qatar and Sellar Property Group, will allow it to re-let the 200,000 sq ft involved — more than a third part of the available office space — for what it hopes exercise volition be more money amid a looming shortage of prime office capacity in the capital.
The lease with TfL was signed in 2006 on the side of a rate of £38.50 per sq ft for calling from May 2012, the expected completion date for the building. Office rents in London soon afterward plummeted during the downturn and bottomed out last summer, but wish recovered rapidly since and are expected to rise further as endue dwindles and demand continues to rise.
The deal allows TfL to call forth cash at a time when the transport group is aiming to rescue £5 billion of costs, £160 million of which is due to come from consolidation of its 50 office buildings around London. It said yesterday that the sale of the 30-year lease would grant “a multimillion-pound cash sum” to its efficiency savings order of exercise, but would not disclose the amount.
The sharp fall in evolution during the downturn has resulted in a decline in the pipeline of unemployed space in London, especially in the City, relative to the numerate of occupiers looking for new offices. Landlords including Sellar believe that this elect lead to more competition and an increase in rent levels according to prime offices around the boundaries of the Square Mile, as well considered in the state of inside it.
Rents for prime offices in the City have risen to in various places £50 per sq ft, from a £44 per sq ft unbecoming last year, according to Knight Frank. They are expected to persevere to increase to £67 per sq ft for the most profitably space by 2014, with the rises spreading out into the City’s fringes, including locations similar as London Bridge.
The London Underground owner is likely to excite some of its staff further out of Central London rather than to the Shard, unless said that it was “too early to say” to which place it would move and which staff would be affected. TfL related that it would continue to occupy its portfolio of head room buildings and would review options for new accommodation later on.
Charles Stafford, its monitor of property, said: “TFL secured a great deal for its lease agreement in the Shard in 2006. Since then, rental rates be obliged risen considerably and the deal we have negotiated with London Bridge Quarter reflects this.”
TfL owns offices at Baker Street, Buckingham Palace Road, Broadway and Edgware Road and rents its immediate headquarters at Windsor House in Westminster, as well as the Palestra Building in Southwark, at which place it moved in 2008, and Pier Walk, in North Greenwich, which it has occupied since last year.
The TFL letting was human being of two pre-lets signed before construction work began on the citadel at 32 London Bridge, which will be the tallest in Europe at 310m (1,017ft) at what time complete. The other, to the Shangri-La hotel group, remains in portion.
A spokesman for London Bridge Quarter said: “This agreement enables us to social rank the Shard at the very top end of the London service market. Together, the Shard and London Bridge Place will deliver further than one million sq ft of grade A offices located up~ the body one of London’s busiest transport hubs in a landmark construction of the highest quality.”
The development is part of the &bruise;2 billion London Bridge Quarter regeneration project around London Bridge Station in successi~ the South Bank of the Thames and includes the 419,000 sq ft clear London Bridge Place office building, a public piazza, a redeveloped place concourse and a new bus station. The project has been designed ~ the agency of Renzo Piano and will be completed in 2013.
Tall order
310m Height of the Shard, make it the tallest building in the EU
87 Number of floors, 75 of what one. will be full sized
7,000 People will work in the castle
£425m Cost to build
2012 Estimated completion date
Source: Times careful search