London’s biggest deals for October
1 Aldwych House, 71-91 Aldwych, WC2
61,951 sq ft
Tenant: WeWork
2 Verde (formerly Eland House), Stag Place, SW1
58,620 sq ft
Tenant: PA Consulting Group
3 The Whitechapel Building, E1
56,194 sq ft
Tenant: Government Digital Service
4 Scandinavian Centre, 161 Marsh Wall, E14
40,343 sq ft
Tenant: undisclosed
5 South Bank Tower (formerly Kings Reach Tower), SE9
32,366 sq ft
Tenant: DNV GL Group
Significant October deals
41 Tower Hill, EC3
Type of deal: Investment
Buyer: SRE Group
Seller: Société Générale
Price: £84.5m
Louisa Clarence-Smith, EG’s City reporter, writes: Hong Kong-listed SRE Group, a subsidiary of China Minsheng, bought the London headquarters of French bank Société Générale for around £84.5m in a sign of continued confidence in the City from Asian investors. The deal was subject to a sale and leaseback from SocGen for a term expiring on 31 March 2020 at a rent of £6m pa. SocGen is due to relocate all staff to its new offices at One Bank Street, E14, in 2019. SRE Group said the block had “significant potential for enhancement of value” through refurbishment and/or redevelopment. Savills advised SocGen and SG Hambros Bank. BNP Paribas acted for SRE Group.
10-12 Great Marlborough Street, W1
Type of deal: Sale
Size: 70,000 sq ft
Seller: BlackRock
Buyer: Alduwaliya Asset Management
Price: £104m
Shekha Vyas, West End correspondent writes: BlackRock sold Sony Playstation’s European headquarters to Qatar’s Alduwaliya Asset Management for £104m – a 4.5% yield, in an off-market deal. The asset was held in the £3.3bn BlackRock UK Property Fund, which has experienced higher than usual redemptions since the EU referendum. The deal follows TH Real Estate’s sale of Ryder Court, SW1, on behalf of Henderson – to Chinese developer Vanke – to repay redemptions on the £3.9bn UK Property Fund. The investments signal a continued appetite from overseas investors keen to take advantage of the post-EU referendum currency window but suggest a slight softening of West End yields in the West End. The property is fully let to Sony Computer Entertainment Europe until 2028.
People, politics and peculiarities
Foreign ownership examined
Another busy month for London mayor Sadiq Khan. He has launched an investigation into the impact of foreign home ownership in the capital as part of research into how to support development and fund homes for Londoners.
Bridge costs probed…
The mayor has also ordered a new review of the garden bridge proposals to see whether the project provides value for money to taxpayers. Around £120m of the estimated £185m cost is expected to come from the public sector and taxpayer.
…as wild future proposed
And while we are on the subject of the Garden Bridge, conservative MP Oliver Colville says if the idea is for it to be leafy then it should have wildlife on it, suggesting it could become a hedgehog sanctuary. Is the idea of it becoming a home for cute wildlife a ploy to win over the strong local opposition?
Rent scheme revealed
Back to the mayor, and details of his London Living Rent scheme have also been unveiled. London Living Rent homes will have rents based on a third of average household incomes in each borough.
Mayor’s say in Brexit sought
Meanwhile, London businesses have called on the mayor to have a role in the Brexit negotiations. A survey showed it was considered the second most important task for Khan after affordable housing.
But is it art?
Noisy neighbours might be one thing but for residents at Neo Bankside the problem is nosey neighbours. All was fine at the glass-fronted luxury apartments until the new extension to Tate Modern opened and residents found their homes the subject of gallery visitors’ photographs, taken from the public balcony. Sir Nicolas Serota, out-going head of the gallery, has suggested they get net curtains.
Rates on the rise
London’s business rates will rise by an average of 11% next spring when the new revaluation rates come in. Retail and restaurants are among the hardest hit.
Avenue expansion
Almacantar has submitted plans for the redevelopment of 125 Shaftesbury Avenue, WC2, which will see the building increase from 245,000 sq ft to 332,000 sq ft
Record for Ralph Lauren
New Bond Street has set another rental record with Polo Ralph Lauren paying £2,225 zone A at rent review for 1-5 New Bond Street, W1 – an 11.5% rise on the previous record rent.
Capital shrinkage
Flat sizes are shrinking as developers in London look to increase the number of apartments in schemes. It comes at a time when research by UBS showed that the capital is at risk of a housing bubble.
Prime values fall
Prime London residential values are expected to fall 9% in 2016 according to research by Savills, with growth not expected to return until 2019.
Sounded out?
The Curzon Mayfair is at risk of closure after the developer converting the offices above it to residential asked the arts cinema to pay £500,000 for sound proofing.
