The Week's London Deal Sheet
The Deal Sheet is a weekly compilation of Greater London and beyond's biggest leases, sales, financing deals, construction updates and personnel moves. Have news you’d like to submit? Email mark.faithfull@bisnow.com.
Canary Wharf Group and Kadans Science Partner are submitting a detailed planning application for a £500M commercial health and life sciences building at Canary Wharf, London.
The 23-storey, 823K SF tower will create a first-of-its-kind vertical campus, the partners said, which will be Europe’s “largest and most technologically advanced” life sciences facility.
Designed by Kohn Pedersen Fox Associates, the building will be located at Canary Wharf’s North Quay and represents the first phase of the creation of a world-leading centre for health and life sciences. An outline planning consent has already been secured for the wider scheme on the currently undeveloped 3.5ha site, with the capacity to deliver 3.5M SF of laboratory and affiliated space.
The building has been designed to allow up to 60% of laboratory space, with the ability to provide chemistry and high-containment facilities. The building’s infrastructure employs a stacking programme allowing for a distributed mechanical, electrical and plumbing engineering strategy, across the stacks. This enables the building to provide laboratory space on every floor.
ACQUISITIONS
LondonMetric has acquired 50% of a triple net lease retail asset from an open-ended property fund for £38M through one of its joint ventures. This reflects an initial yield on cost to LondonMetric of 5.4%, rising to 5.7% upon completion of short-term asset management initiatives.
The 68K SF property is located on a 5-acre site on the Old Kent Road in South East London and is let to B&Q, Pets at Home and Halfords. The site has planning for 1,100 new residential apartments.
Simultaneous with the acquisition, LondonMetric has materially extended the WAULT and increased the annual rent by 54% from £1.4M to £2.1M, with 85% of the income subject to contractual rent reviews.
Following the acquisition, LondonMetric has a 69% equity interest in the joint venture.
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Civitas Investment Management has invested £200M to acquire a portfolio of specialist care properties from CareTech under a sale-leaseback arrangement.
The portfolio comprises a mix of special schools, children’s homes and adult specialist care homes. The investment follows the £1.1B acquisition of CareTech by the co-founders of the business in September 2022.
CIM is the largest investor into specialist care in the UK, with more than £3.5B under management and is focused on investing exclusively into specialist community healthcare and social infrastructure in the UK and Europe, backed by government funding and producing beneficial and sustainable social outcomes.
CIM currently manages an estate of more than 1,200 properties across the UK, with capacity to provide homes for more than 10,000 people, with care and support provided by more than 120 care providers in a combination of supported housing and residential care homes.
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Canada's Cadillac Fairview, the real estate arm of Ontario Teachers’ Pension Plan, has bought 25% of leading UK developer Stanhope from its management team.
The acquisition, principally from Stanhope chief executive David Camp, means Cadillac Fairview joins Alberta Investment Management Corporation, which also owns 25%. Japan's Mitsui Fudosan has a 30% stake and the Stanhope management team retains 20%.
Stanhope will continue to be management-run, providing development management services to a wide range of key clients and Camp will remain as chief executive.
RESIDENTIAL
Affordable housing developer Pocket Living has submitted a planning application for 74 affordable homes for local first-time buyers on land adjacent to Snaresbrook station in east London. The submission also includes plans for a new pathway for the local community.
The scheme is car-free for residents, with the exception of blue badge parking, and utilises land that is currently used as a car park to deliver the 100% affordable scheme.
The proposed scheme will deliver a total of 74 affordable homes comprising 73 one-bedroom apartments and one two-bedroom apartment. All of the homes will be available at a 20% discount to market value to local first-time buyers who live or work in the London Borough of Redbridge. The proposal will also represent 15% of the Council’s annual target for affordable homes.
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Levitt Bernstein has secured planning permission for a pilot net-zero carbon housing scheme for the London Borough of Islington.
Located on Vorley Road, the scheme comprises three buildings with a total of 72 homes, 51% of which will be for social rent, and all will be designed to Passivhaus standards.
All the homes are dual or triple aspect with views toward Girdlestone Park or the city. The full-width balconies serve multiple purposes, such as providing private amenity space and solar shading.
The car-free scheme, which is on a narrow site, will also include new community facilities in a civic podium, consisting of a new home for Archway Library and a new medical centre. The three buildings above carefully mediate between the 1960s massing of the town centre ‘island’ and the surrounding Girdlestone Estate. Construction on the scheme is set to start in 2023.
LEASING
GSK has announced that its new global headquarters will be in central London. The company will move to the new headquarters in 2024 from its current location in Brentford, west London.
The site on New Oxford Street (currently known as the Earnshaw), which is under construction and scheduled for completion next year, was selected by the company following a comprehensive search of potential new HQ sites across London, the company said.
It offers close proximity to the UK capital’s fast-growing global Life Sciences hub, London’s Knowledge Quarter, and GSK’s existing collaboration partners including the Francis Crick Institute and King’s College London.
The new global headquarters will be the base for around 3,000 people, who will continue to use a hybrid working model. The move marks a return for GSK to central London.
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SEGRO Park Hayes, the 240K SF urban industrial development in west London, has been completed and is almost fully occupied with only a single highly sought mid-box sized unit remaining.
Located on the site of the former Nestlé chocolate and coffee factory, the 30-acre site was acquired by SEGRO in 2015, and developed in a partnership with Barratt London to create a scheme to deliver more than 1,300 new homes co-located alongside the high-quality sustainable industrial park.
SEGRO has also secured a lease with Transglobal Express, the air freight, sea freight and international courier services provider, which is upsizing from a SEGRO asset at Heathrow to occupy a 35K SF warehouse and distribution facility. The 84.3K SF unit has been let to a company in the creative industries. SEGRO Park Hayes is now almost fully occupied, with only a single remaining unit totalling 25K SF available.
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M&G Real Estate has signed a management agreement with U.S. flexible offices group Knotel to operate 51K SF at the Hallmark Building, adjoining its 40 Leadenhall development in the City of London.
The deal is the largest with a flexible offices group in the UK this year, ahead of Landmark Space's lease of 35K SF at Orchard Place on Bressenden Place in Victoria Street and Knotel's lease of 33K SF at 39-45 Finsbury Square.
Knotel will operate the space from the beginning of next year across the fourth, fifth and sixth floors of the 174K SF building at 52-56 Leadenhall Street.
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LXI REIT has exchanged contracts with Travelodge Hotels on a “material and accretive lease re-gear” initiated by LXI on all of the 122 Travelodge hotels that formed part of the Secure Income REIT portfolio.
The 12 Travelodge hotels that formed part of the LXI REIT portfolio have already been re-geared or were new forward fundings in return for inserting caps and collars (4% pa and 1% pa, respectively) on the previously uncapped and uncollared RPI rent reviews and converting the reviews to CPI+0.5% pa.
The company has extended the unexpired lease terms on the 122 Travelodge hotels by a weighted average of nine years. This has the effect of extending the WAULT on the hotels from 19.5 years to 28.5 years and increasing the WAULT of the total LXI REIT portfolio from 25.6 years to 27.3 years.
DEBT
Natwest has arranged a £285M debt package that will help build 3,000 homes in London and the south east with a value of £1B.
The package will support the current schemes of a joint venture between global investment organisation EQT and Sigma Capital Group, which delivers and manages built-to-rent homes, as well as the JV’s acquisitions planned for next year.
Natwest agreed a £150M debt package with Leumi UK in February 2022 and sourced further liquidity from Allied Irish Bank and Dutch bank NIBC to bring up the total to £285M.
The JV initially plans to deliver the 3,000 homes that will be operated under Sigma Capital’s ‘Simple Life London’ brand and offered at an affordable rent dependent on each location’s household income. They are intended to be sustainable and, where possible, tap into local community heating networks and use photovoltaic panels.
REFURBISHMENT
UK construction company Glencar has been appointed to undertake the redevelopment of the Ealing Studios in west London. Glencar will work alongside Pella Real Estate Partners and Christopher Smith Associates to deliver the project.
The studios, which are some of the oldest in the world, have been making films since 1902 and the works will see the installation of a new 14K SF stage, which will take 18 months to build, as well as new workshops, additional office space, a new entrance reception, security, and site hub that will serve as the new face of Ealing Studios.
The new white Ibstock Engobe brick building has been designed to complement the distinctive art deco aesthetic of the original 1930s Grade II-listed stages that still exist at the studio and will be built to BREEAM Outstanding certification.
