Interpublic Group, one of the world’s largest advertising companies, is in advanced talks to take 120,000 sq ft of office space at British Land and GIC’s 135 Bishopsgate, EC2.
The company, which owns agencies including McCann, Magna Global and Weber Shandwick, is planning to consolidate its London office footprint, bringing many of its 42 London-based brands to a new City base.
If approved, IPG would share its new office with TP ICAP, the world’s largest interdealer broker, which has also agreed to take 120,000 sq ft, paying around £55 per sq ft.
Italian food hall Eataly is due to open its first UK marketplace at the building in 2020, having agreed a deal for 42,000 sq ft on the ground and first floors.
New destination
The IPG move would be a coup for BL and GIC, which are undertaking a long-term project to broaden Broadgate’s appeal beyond financial services to attract a more diverse range of occupiers and make it a “seven-day-a-week destination”.
Developed in the 1980s as a 325,000 sq ft banking HQ, 135 Bishopsgate was formerly occupied by RBS.
BL and GIC are carrying out a major refurbishment of the building, which includes tearing down the external imposing balustrade and adding steps down to street level and additional retail space, green spaces and terraces.
IPG’s agencies are currently spread across seven buildings in central London.
It is understood the requirement for a new office is driven by a December 2019 lease expiry at McCann Erickson House at 7-11 Herbrand Street, WC1, where its brands – including McCann, McCann Health, Craft London and Avrett Free Ginsberg – occupy all of the 66,405 sq ft building.
The business also has a January 2021 lease expiry at 42 St John’s Square, EC1, where its brands including Cadreon, Initiative, IPG Mediabrands and Magna Global occupy 43,497 sq ft.
The deal follows IPG’s decision to relocate its agency MullenLowe Group from West London to East London in 2015, moving its office from Knightsbridge to C Space, at 37-54 City Road, Shoreditch, EC1 – reportedly because staff wanted to be based in a “cooler” location.
Rental savings
The migration from the West End to the City will come at a rental discount.
The average rent for refurbished office space in the City in 2017 was £65.50, with a top rent of £81.50, according to Radius Data Exchange.
This compared to a West End average rent for refurbished office space of £75.39 and a top rent of £135.00.
The City is also offering good value against Shoreditch. In Q4 2017, average prime rents were £75.57 per sq ft in the City, compared to £73.65 in the City fringe, according to Savills.
JLL is advising Interpublic; CBRE and JLL are letting agents on 135 Bishopsgate.
All parties declined to comment.
To send feedback, e-mail Louisa.Clarence-Smith@egi.co.uk or tweet @LouisaClarence or @estatesgazette
