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Kuwaiti Owner Plots Future For District That Symbolizes London's Change

British actor Bob Hoskins might have said it best decades ago as he climbed out of an abandoned warehouse and surveyed a scene that included scruffy parking lots, crumbling buildings and derelict land: “They’re calling it the most important regeneration project since the Great Fire.”

Famous for his roles in The Long Good Friday, Hook and Who Framed Roger Rabbit, Hoskins was talking about a then-deteriorating stretch of land on the River Thames between London Bridge and Tower Bridge. The BBC archival footage from a prescient interview 42 years ago depicts him analysing and lamenting changes being made to London’s South Bank, an area that for 200 years housed the docks where goods shipped back from the British Empire were once unloaded.

Hoskins mentions that a 22-acre parcel in the area was recently bought by “Kuwaiti investors” who planned to build 2M SF of offices. That investor was St. Martins Property, part of the Gulf state’s sovereign wealth fund, and that office scheme eventually became the More London Place, home to London City Hall and global corporations like PwC and EY.

Now the property needs to undergo its own huge regeneration. 

St. Martins' More London scheme, which it built, sold and bought back for £1.7B.

The changes coming to More London are less dramatic than those wrought by the end of an empire and the invention of the shipping container, which altered the way goods moved around the world.

But for St. Martins, the shift in how companies are using office space and the need to decarbonise older buildings mean that a development that was at the centre of one of London’s biggest investment deals needs to undergo a second reinvention.

The Greater London Authority has moved out of one building on the More London estate, leaving a unique and complicated building empty. Another building on the estate is about to be vacated, requiring a refurbishment. And EY is mulling moving out of its adjacent office as well. 

St. Martins is betting that offices remain the future of the scheme rather than adding other uses. But it has a lot of empty space to fill to make that bet pay off. 

“It’s reached a stage in its cycle where quite a lot of work needs to be done to the buildings, which are all of a certain age,” Union Street Partners partner Mark Fisher said.  

“They’re being careful not to lose tenants. They’re nursing it along.”

The area between London Bridge and Tower Bridge was for centuries part of the Pool of London, the city’s historic port area. London Bridge was as far west as ships with tall masts could sail.

By the 19th century, the South Bank of the Thames was lined with wharves where goods from the British Empire came in. Until the area was brought under the control of the Port of London Authority at the beginning of the 20th century, the area was also the epicentre of goods smuggled into London, and thievery was rife on the unpoliced docks. 

But in the 1960s, the advent of container shipping and deep-water ports led to the area’s wharves and warehouses shutting and falling into disrepair. Huge stretches of the banks of the Thames became run-down, unoccupied eyesores. 

In the early 1980s, a 22-acre parcel of this land was bought by St. Martins Property, a UK real estate developer owned by Future Generations Fund, the sovereign wealth fund of Kuwait. St. Martins worked up ambitious plans for development in the first half of the 1990s. Known as London Bridge City, the project included more than 2M SF of offices in an area just across London Bridge from the City of London, next to one of the capital’s busiest train stations but with no history as an office location. 

St. Martins sold the site to German bank Depfa in 1997. Depfa brought on board CIT Group as its local development partner, and CIT eventually took over as full owner. 

Major office occupiers flirted with the idea of moving to the new scheme, but it really got off the ground in 1999 when the GLA chose it as the location of its new headquarters and assembly building. City Hall opened in 2002, costing £43M to build, and the GLA took a 25-year lease. In the years that followed, blue-chip occupiers like PwC and EY also headed to London Bridge City, a Hilton Hotel was built, and shops and restaurants flocked to the site. 

A thriving mixed-use scheme arose from the post-industrial area, and in 2013, St. Martins paid £1.7B to buy back the nearly fully leased property, since renamed More London Place, in one of the largest property transactions in London’s history.

Nearby developments like The Shard might not have happened if London Bridge City had not established the area as a viable commercial location, transforming the South Bank into a commercial and cultural centre of London stretching from Westminster to Tower bridges. 

The now-vacant City Hall

Unions Street’s Fisher said the 185K SF former City Hall building, officially named 110 The Queen’s Walk, could have made an interesting cultural destination suitable for an art gallery or the like. But commercially, this might not have been viable, and St. Martins late last year revealed designs for an office-led scheme that attempts to make a virtue of the building’s idiosyncrasies. 

The former City Hall contains a 500-metre helical walkway that ascends the entirety of the building’s 10 storeys. At its bottom is the former debating chamber for the London Assembly, and at the top sits a public event space that was called London’s Living Room. Office space for GLA staff was in the upper floors, arranged around the huge central atrium created by the staircase. 

A detailed planning application for the building has not yet been submitted by St. Martins, but early plans from architect Gensler and landscape architect LDA Design offer some flavour. 

Some of the building’s external structure would be retained, plans show, bringing the sustainability benefits of retrofitting instead of launching a new development, although glazing would be replaced. A series of internal balconies would feature green plantings, and images of the scheme show external greenery running around the outside of every floor. 

But the shape of the building would be slightly altered to standardise the interior and allow more of it to be utilised. Individual floor plates would be extended to further maximise lettable space, and cutaways of the scheme imply that while the large central atrium is being retained, the spiral ramp could be on its way out, again increasing the building's lettable area.

The ground floor would feature retail and leisure space, with upper floors devoted to offices. The scheme’s website says that a planning application will be submitted in the spring, with the aim of consent being granted this summer. Construction would commence in 2025 and be completed in 2027. 

St. Martins declined to comment about its plans to Bisnow. Kuwaiti law makes it illegal for staff at the Kuwait Investment Authority, which ultimately manages St. Martins, to talk about the fund’s activities. 

“Whether [110 The Queens Walk] would provide the best office space is another thing,” Fisher said. “It’s a fantastic building, but it’s quirky.”

The spiral staircase at the centre of the former City Hall building

Across the road, at 6 More London Place, a 148K SF office building that is part of the estate is about to become vacant. St. Martins received consent from Southwark Council in January to undertake a Category A refurbishment to entice new tenants. The process includes a new double-height entrance, enlarged reception spaces, private terraces and changes to the facade. 

And as EY looks to potentially move from its 350K SF office at 1 More London, another big chunk of vacant space could open up when the firm's lease runs out in 2028.

St. Martins is looking to fill office space in a London submarket that is performing in line with other areas of the capital, with similar problems and bright spots. South Bank takeup was 129K SF in the third quarter, data from BNP Paribas Real Estate shows, up 3.2% on the second quarter of the year but down 27% year-on-year. Vacancy in the South Bank market has increased to 9.4%, above the five-year average of 7.9%, as large new schemes come online.

Of those new schemes, some, like Landsec’s The Forge and Native Land’s Arbor, have found tenants. Others, like Barings’ Tide, remain unlet. 

“The vast majority of tenants are homegrown and tend to be moving within the area,” Fisher said.

He added St. Martins' biggest challenge could be that it managed to attract new occupiers to the area once before, starting with the GLA and followed by its global corporations, but to keep More London viable, it will have to repeat the trick.

Bisnow is holding an event on the future of London offices on 21 March. Find out how to attend here.