City strong office lettings 21st July 2016

Occupiers in the City of London have signed up to take a combined 565,000 sq ft of predominantly office space since the EU referendum in a defiant display of confidence in London’s long term future. CoStar News takes a look at the leasing deals that have crossed the line in the Square Mile in the weeks after the Brexit vote.

The total is outpacing City take-up compared with this time last year, when around 1.5m sq ft of space was leased over the whole of Q3 2015. All of the occupiers to have signed in the last three and half weeks entered into negotiations with landlords prior to 23 June but have since opted to commit to the capital despite the perceived economic uncertainties.    

Cloud-based communications and media firm 8x8 signed a deal to take 16,000 sq ft at the Relay Building in Aldgate, E1, on the day of the referendum. The company will occupy the third floor at a rent of £55 per sq ft on a 10-year lease with no breaks. GM Real Estate and Allsop are the letting agents on the building, which is owned by Angelo Gordon; Brasier Freeth acted for 8x8.

Historic England has signed a deal on 21,000 sq ft in Blackstone’s The Atrium Building, Cannon Bridge House, 25 Dowgate Hill, EC4. The public body that looks after England's historic environment has taken a 15-year lease and will pay a rent of £53 per sq ft. Bilfinger GVA advised Historic England; GM Real Estate and Savills advise Blackstone.

Derwent London has pre-let 84,600 sq ft in four office transactions at its 185,000 sq ft refurbishment of The White Chapel Building E1, representing 46% of Phase 1. While Derwent was unable to confirm the tenants, it is understood that Reddie & Grose, a UK firm of patent and trade mark attorneys, has signed to take 20,000 sq ft in the building; while Perkins & Will, a US architecture and design firm, has signed to take 30,000 sq ft and will move from 10 Bonhill St, EC2. Maritime insurer, The Shipowners’ Club is under offer to take a further 20,000 sq ft in Derwent’s scheme and will relocate from St Clare House, 30-33 Minories, EC3. News Corp-controlled Unruly Media has taken around 14,000 sq ft.

The four tenants will pay a combined rent of £4m pa, 8% above December 2015 ERV with c.70% signed since the EU referendum. All are on ten-year leases, with 59% subject to a five year break and half subject to minimum rental uplifts on first review. 

The average rent free period is eight months for the two leases where there are tenant breaks, rising to 17 months if no breaks are exercised.

Derwent London’s letting agents on The White Chapel Building are BNP Paribas, Colliers and Cushman & Wakefield. Farebrother advised Reddie & Grose.

David Game College has taken 58,966 sq ft of basement to fifth floor of D1 space from The Official Custodian for Charities at London Guildhall University, 31 Jewry Street, EC3. The quoting rent was £35 per sq ft. Gryphon Property Partners acted for The Official Custodian for Charities.

Aurora Fashions, a holding company of several retail fashion brands, formed in 2009 to purchase a number of businesses from the collapsed Mosaic Fashions, last week signed a deal to re-gear its lease on 50,000 sq ft at Telephone House, 69-77 Paul Street, EC2.

AlphaSights, an information services company, has signed a new sub-lease on the 19,921 sq ft third floor of Thames Court, 1 Queenhithe, EC4. The asking rent for the floor was £57.50. Cushman & Wakefield is the leasing agent.

In Aldgate Tower, Public Lab, a DIY environmental science community, is due to sign for 15,000 sq ft in the building this week. GM Real Estate and BNP Paribas Real Estate are the leasing agents.

Two other tenants signed the day after the referendum: banking regulator, Lending Standards Board, which took 1,065 sq ft in Abbey House, EC1; and property investment company, Trafalgar House, which took 4,864 sq ft in Cheapside House, EC2.

British restaurant, café and catering group, Benugo, has signed a lease at Picton’s Angel Gate Estate for its head office. The 3,177 sq ft unit has been let on a 10-year lease at an annual rent of £151,000, reflecting £47.50 per sq ft.

Yesterday, HB Reavis confirmed that US bank Wells Fargo had bought the 33 Central office development for its own occupation. Upon completion in Q3 2017, 33 Central, which is HB Reavis’ first London development, will allow Wells Fargo to consolidate all of its London-based team members under one roof. After initial leasing discussions, Wells Fargo approached HB Reavis expressing the wish to own and occupy the whole of the 227,000 sq ft development. Knight Frank and Gerald Eve were agents for 33 Central, and CBRE advised Wells Fargo.

Gerald Eve also acted for Nomura on its sublease of 23,000 sq ft at 1 St Martin's Le Grand, EC1, to University College London, which signed yesterday. UCL agreed a six-year lease on the office space which had a quoting rent of £45 per sq ft. Deloitte Real Estate acted for UCL.

Exterion Media, Europe’s largest privately held out of home media owner, has signed a deal on the whole 23,000 sq ft seventh floor in Blackstone’s Lacon London, the US private equity firm’s newly redeveloped 215,000 sq ft headquarter building, at 84 Theobalds Rd, WC1.

Last week, British Land and Oxford Properties announced they had completed their lettings campaign at The Leadenhall Building with a trio of deals, two of which completed since the EU Referendum. They included Kames Capital, which completed an 11-year lease over 7,000 sq ft on level 43, the highest remaining available floor in the building; and MS Amlin, which took expansion space on level 27, which provides 13,000 sq ft of offices. Cushman & Wakefield and JLL are the letting agents on 122 Leadenhall Street.