UK’s Big Beasts Look Outside Home Turf To Refill Development Pipeline
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A number of the UK’s largest REITs and property companies are making acquisitions that will allow them to undertake significant new London office developments. And they are looking outside of their typical home turf.
Great Portland Estates, typically seen as a West End specialist, is in talks to buy BT’s 273K SF City of London HQ from the telecoms company for around £200M, according to CoStar. A joint venture between Canary Wharf Group and Brookfield was the underbidder.
CoStar said BT is in talks to move its HQ to One Braham, the 325K SF tower being developed by Aldgate Developments on the eastern edge of the City.
Any buyer of BT’s building, in the shadow of St. Paul’s Cathedral, is likely to undertake a significant redevelopment. Cushman & Wakefield is advising BT.
At the end of last year, Great Portland’s fellow REIT Landsec paid £87M for 25 Lavington St. on the south side of the Thames near Blackfriars Bridge. The tenants are moving out of the 128K SF former printworks, where a major redevelopment will likely be undertaken on a site that totals 1.6 acres. It also has development schemes at nearby 105 Sumner St. and Red Lion Court. Brookfield was an underbidder on the Lavington Street deal also.
Elsewhere, British Land is progressing plans for a huge mixed-use redevelopment at Canada Water in south east, an area well off the normal beaten track for UK REITs and London developers. The £3B scheme will include 2M SF of offices, 1M SF of retail and leisure space, 3,000 new homes and community facilities.