Shoreditch office news 11th December 2012

The City of London Corporation has formally instructed Allsop to sell the 22-property Shoreditch Estate, E1, in a move which could kick-start an office-led development of more than 300,000 sq ft.

The City is selling the long leasehold interest in the three sites at 1,2 & 3 Shoreditch High Street, where the original Dragons’ Den series was filmed, covering a total area of 201,735 sq ft over 2.02 acres. The Corporation is guiding that the sites be redeveloped into an office-led scheme comprising a minimum of 280,000 sq ft, of which 40,000 sq ft could be put to residential use.

Allsop is not guiding an asking price for the development given that the three sites are to be sold via a single three year call option agreement with obligations that the developer must meet prior to drawing down three separate development agreements. Individual 150 year headleases will be granted on completion of the development of each site.

The site has been mooted for a potential sale since the summer, but this week’s appointment of Allsop marks the start of the formal sales process, which is likely to be concluded around February. The entire Shoreditch Estate is let to 36 tenants producing a total rent of £1.36m per annum.

One Shoreditch – the former ‘Nicholls & Clarke’ site - comprises 0.96 acres and 13 properties of various uses and ages, the majority of which are now derelict and dilapidated. Full planning consent was granted on 5 October 2011 for the redevelopment of the site and adjoining Depot site, 10 Blossom Street, to provide around 155,032 sq ft of office and ancillary space. The buildings are currently multi-let to 24 tenants, predominantly on short term leases with landlord break options, allowing the implementation of the planning consent. The current income is £472,402 per annum.

Two Shoreditch comprises a triangular site of circa 0.69 acres bounded by Fleur de Lis Street, Elder Street and the railway lines to the north. The site contains properties totalling 51,181 sq ft and includes a large open courtyard. An initial feasibility study has been undertaken showing a B1 office scheme of circa 91,106 sq ft NIA. The buildings are currently multi-let to nine tenants on short term leases with landlord break options allowing redevelopment or refurbishment. The current income is £130,376 per annum.

Three Shoreditch comprises a rectangular site of around 0.37 acres bounded by Blossom Street, Fleur de Lis Street and Elder Street and contains two properties totalling 26,313 sq ft. An initial feasibility study has been undertaken showing a part conversion and part new build 61-unit residential development of 37,767 sq ft net.