The Biggest Office Schemes Completing In 2023 Are Better Set Than A Year Ago
The biggest office schemes completing in London this year are a lot better positioned when it comes to tenants than their equivalents 12 months ago — although half of them are still empty as they approach completion.
Analysis by Bisnow, using data provide by Deloitte, found the 10 largest schemes scheduled to complete in 2023 are 47% leased. That compares to the 10 largest schemes being 82% empty at the beginning of 2022.
There are a couple of caveats worth pointing out. Some of the schemes on this year’s list were scheduled to complete in 2022, but construction timelines ran over, and they remain unleased or virtually so. And one scheme being built by Google is an anomaly, having been in the offing for almost nine years now.
Here’s how the largest offices opening this year are set.
40 Leadenhall is an 880K SF, £1.4B City of London scheme being developed by Nuveen and M&G Real Estate on a site that Nuveen bought out of a distressed debt situation during the last recession. It still has 257K SF left to lease according to its website, but last year secured U.S. law firm Kirkland & Ellis as an anchor tenant, taking 215K SF.
Toward the end of this year or perhaps early next year, Google is set to complete the construction of its new UK headquarters at King’s Cross Central, the mixed-use estate owned by Australian Super and Argent. Google is set to occupy 650K SF of the 870K SF building, with the remainder allocated to retail, leisure and community uses. Google paid at least £1B to buy the long leasehold to the site and develop the building, having committed to the site in 2014.
8 Bishopsgate is one of the schemes in which completion slipped from 2022 to 2023. The 770K SF City office tower is being developed speculatively by Mitsubishi Estate and Stanhope, and has now secured its first tenant, with law firm HFW taking 62K SF. But that still leaves 708K to lease.
21 Moorfields is now owned by Australian pension fund TCorp and Lendlease, which paid Landsec £809M for the building, a sharp discount to the £950M at which it was put up for sale. Deutsche Bank will occupy the 568K SF building on a 25-year lease.
This 450K SF City of London office building got its pre-let in early, with Linklaters signing to take 300K SF of the scheme in 2020. There is now just 66K SF left to lease in the building, which is owned by private property company Great Elm.
YY London is the second scheme to see completion slip from 2022 into 2023, following a three-month delay. When Cindat Capital teamed up with Oaktree Capital and Quadrant to buy 30 South Colonnade in Canary Wharf in 2019, it picked up one of the few distressed London office deals of the past five years. Quadrant is overseeing a refurbishment that will create 408K SF of office space following the departure of Reuters, which moved out in 2020. At the start of 2022, the space remained unleased.
Earlier this year, developer British Land announced that law firm Reed Smith was relocating its HQ to its 302K SF Norton Folgate scheme at the northern edge of the City of London. The company is taking 127K SF, downsizing from its existing space, leaving BL with 175K SF of office space still to lease.
As this list approaches its conclusion, more of the buildings are entirely unlet ahead of completion this year. Among those is Space House, the refurbishment of a 255K SF Richard Seifert-inspired office scheme being developed by Seaforth Land in London’s Midtown district.
One Keskidee Square
Formerly known as building S3, One Keskidee Square is a rare example of a building at the King’s Cross Central Estate that is not pre-leased well ahead of completion. The 245K SF building has no tenants ahead of a scheduled summer 2023 completion.
One Millennium Bridge
Angelo Gordon and Beltane’s extensive refurbishment of One Millennium Bridge on the banks of the river Thames in the City of London rounds off the list. According to the scheme’s website, the 225K SF has no tenants as yet.