Mixed Fortunes — The 5 Biggest Office Schemes Opening In London In 2018
London's skyline is rapidly changing, as this image from the City of London Corp., forecasting the City skyline in 2026, shows.
In the shorter term, 2018 is set to be a pivotal year for the London office market. Supply of new space will begin to drop after 2017's cyclical peak, according to Deloitte Real Estate, and 44% of the space set to be completed this year is already leased.
But with Brexit negotiations at their most delicate, demand will be at its most skittish.
Here are the five biggest office schemes opening in 2018 and who is occupying them, according to Deloitte. In terms of lettings, some are doing significantly better than others.
70 Farringdon St. — Goldman's new HQ
Goldman Sachs broke ground on its 825K SF London headquarters before the U.K. voted to leave the EU. As Brexit has been negotiated, there has been speculation Goldman would move staff to Frankfurt and thus not occupy the entire building — especially after Chief Executive Lloyd Blankfein started trolling the U.K. government on Twitter. There is no sign of it looking to sublease any space yet ahead of the building completing in the third quarter.
The International Quarter — the new home of the Financial Conduct Authority
The Financial Conduct Authority pre-let 425K of the 515K SF building at the International Quarter in Stratford. Lendlease and LCR are delivering the scheme in the middle of 2018. The FCA's pre-let in building S5 convinced Deutsche Asset Management to pay £370M for a building in what is still an emerging office location.
10 Fenchurch Ave. — a new HQ for M&G Investments
M&G, the investment division of insurer Prudential, in 2014 signed for 11 of the 13 floors at the 398K SF 10 Fenchurch Ave., which is being developed by Greycoat and CORE on behalf of Italian insurance company Generali.
The Scalpel — two-thirds still to be leased
The Scalpel at 52 Lime St. in the City is being built by the development arm of U.S. insurance company WR Berkeley. The company will occupy 81K SF of the 387K SF building, and financial and insurance firms Axis and BPL have taken space, but 61% of the building is unlet. The 35-storey building is scheduled to complete in the second quarter.
The Can of Ham — first tenant close
The 326K SF 70 St. Mary Axe, aka the Can of Ham, is due to complete later in 2018 but has still not secured its first tenant. Law firm Sidley Austin is rumoured to be on the verge of signing 120K SF in the building for a new HQ, which would leave two-thirds of the building unlet.