City bags £1 billion investment with Bishopsgate skyscraper
THE world’s largest office developer, Brookfield, has given London a £1 billion vote of confidence, pushing the button on construction of the City’s biggest skyscraper without tenants in place.
Subsidiary Brookfield Multiplex will immediately begin work on the 613-foot superstructure of 100 Bishopsgate, investing hundreds of millions. The 900,000-square-foot tower will complete in late 2018.
Brookfield’s decision to build without signed leases for at least some of the 37 floors is unprecedented. The North American owner of 93 million feet of office space around the globe has never before built without a pre-let.
The board in New York gave the goahead this week. “The decision to commence construction has not been taken lightly,” said Martin Jepson, boss of Brookfield Proper t y Partners’ UK Office Division. “It has been taken in response to the particularly buoyant market conditions… which gives us every confidence of leasing a significant proportion before completion.”
Knight Frank — the building’s letting agent along with GM Real Estate — yesterday reported City vacancy rates at 5.4% are at their lowest for eight years. Prime rents are up 4% since January to £65 per square foot.
Brookfield is understood to want to steal a march on the mothballed Pinnacle tower, originally planned for Bishopsgate. New designs, masterminded by Broadgate developer, Sir Stuart Lipton, are being drawn up for the nearby 1000-ft skyscraper. Deutsche Bank has already turned down offers to move into 100 Bishopsgate, which will be worth £1 billion when fully let. Today, Estates Gazette reports the German banking giant is to move to Canary Wharf, consolidating it’s 16 London offices into 350,000 square foot in the Clifford Chance tower.
Brookfield’s confidence has been boosted by successes with Schroders at London Wall, and Amazon which is leasing 400,000 square feet at Principal Place, north of Broadgate. “With 71% of Principal Place and 73% of London Wall Place pre-let, we have significantly derisked our portfolio,” said Jepson.
The architects of 100 Bishopsgate are Allies and Morrison, with Arney Fender Katsalidis. In January, Brookfield seized control of Canary Wharf with the Qatar Investment Authority.