TIAA-Henderson Real Estate is close to agreeing a lease surrender that will pave the way for the long-stalled Can of Ham at 60-70 St Mary Axe, EC3, to start on site in the second half of 2015.
Threadneedle Asset Management – sole tenant of 60 St Mary Axe – has agreed to an early exit on its 2018 lease, and will instead move out in the second quarter of next year. It is close to signing a deal for 65,000 sq ft at Cannon Place, EC4.
TIAA-Henderson has begun procuring demolition for the two existing office buildings that occupy the site and expects work to start as early as August next year.
The breakthrough comes more than six years after the Foggo Associates-designed scheme was first approved by the City of London.
The scheme comprises more than 277,570 sq ft of offices over 24 floors and features a distinctive elliptical design. It was proposed by Targetfollow, but later sold out of administration in 2011 to TIAA-CREF.
TIAA-CREF sold its other main City development opportunity – One Angel Court – to Mitsui Fudosan and Stanhope last year. But it has since acquired substantial development expertise via its merger with Henderson.
The decision to push on with the Can of Ham comes against the backdrop of a falling City vacancy rate and growing tenant demand.
Availability in the City core has dropped from 9.4% to 8.65% over the past year, according to the Q3 London Office Market Analysis.
Meanwhile, just 1.4m sq ft of new stock is due to be delivered to market in 2015 which has not yet been prelet, according to GVA figures, a figure dwarfed by the 2.6m sq ft of City take-up in Q3 2014 alone.
CBRE is advising Threadneedle; Savills and CBRE are letting agents at Cannon Place.
TIAA-Henderson Real Estate declined to comment.
