Sumitomo Mitsui Banking Corporation is considering options for a 200,000 sq ft move in London.
The Japanese banking giant’s UK headquarters is currently at 99 Queen Victoria Street, EC4, an 85,000 sq ft building it leased in 2005. Its lease has a break in 2021 and expires in 2026.
The company also occupies around 35,000 sq ft at Land Securities’ One New Change, EC4.
SMBC is keen to explore options to consolidate its staff into a single building and at the same time secure space for expansion.
The firm was in discussions with Mitsui Fudosan and Stanhope regarding a prelet of Sixty London Wall, EC2, which the pair were trying to buy from Deutsche Fonds.
However, they were outbid by LaSalle Investment Management, which paid £197.5m for the 260,000 sq ft block last month and is already in discussions with a different tenant.
SMBC has therefore begun taking presentations at other City developments that could offer between 150,000 sq ft and 200,000 sq ft in time for a move ahead of its break at 99 Queen Victoria Street.
It is the latest in a string of large occupiers that have begun to engage with landlords much earlier than has traditionally been the case.
DLA Piper has exchanged on a 150,000 sq ft prelet at Mercer Real Estate’s 160 Aldersgate Street, EC1, despite the lease on its current headquarters at 2 Noble Street, EC2, having four years left to run.
It went under offer on the building last year on a subject-to-planning basis, locking in rents in the region of £55 per sq ft – well below current prime City rents of £63.50 per sq ft.
CBRE executive director and head of City leasing Chris Vydra said: “Without question, occupiers are acting earlier before they miss out on their chosen properties and before perceived rapid rental increases in the market.
“Seeking options five years in advance has been very rare. Traditionally, major occupiers would start to research the market three to four years in advance.”
JLL is advising Sumitomo.
