London Around the Market

  London’s biggest deals for January* 8 Finsbury Circus, EC2 74,113 sq ft Tenant: Rathbone Brothers, The Shard, SE1 34,984 sq ft Tenant: MatchesFashion.com Orion House, 5 Upper St Martins Lane WC2 11,404 sq ft Tenant: Omnicom Europe Woolgate Exchange, 25 Basinghall Street, EC2 10,125 sq ft Tenant: Undisclosed 1 Strand, WC2 9,000 sq ft Tenant: Wella UK *At time of going to press. Source: EGi data Significant January deals City deal of the month: Aldgate Tower, E1 Type of deal Sale Size 320,000 sq ft Seller Starwood Capital Buyer China Life and Brookfield Price £350m Jack Sidders, EG’s news editor, says: China Life and Brookfield’s purchase of the Aldgate Tower, E1, for close to £350m – a 4.8% yield – is big news for several reasons. It shows the ongoing appetite for London real estate by the giant Chinese life funds regardless – or perhaps exacerbated by – the volatility of the Shanghai stock market. And it underlines how far Aldgate has come. The eastern City fringe market is often viewed as a location which only looks attractive for development during a brief window when rents elsewhere are full. That may still be the case when the market turns, but for Starwood Capital-backed Aldgate Tower Investments, which speculatively developed the 320,000 sq ft building, it is a huge vindication. West End deal of the month: Building R7, King’s Cross Type of deal Lease Size 120,000 sq ft Lessor Argent Lessee New Look Rent £70-plus per sq ft Jack Sidders, EG’s news editor, says: The Argent-led regeneration of 67 acres of industrial land north of King’s Cross station has escaped no-one’s notice as the pre-eminent success story of London this cycle. But even so, the £70-plus per sq ft New Look has agreed to pay for 120,000 sq ft at building R7 was still a surprise to many. The building is a good 10-minute or more walk from the transport connections in the southern part of the site. An indication of just how much rents have risen is that Sainsbury’s had previously agreed to lease a new headquarters on the same plot way back in 2007 – for roughly half the present price. No doubt the grocer rues the day it decided to walk away from that deal in 2011. People, politics and peculiarities New year movers The new year, new job stories are trickling in. First up is Tom Moore, who has been appointed director in CBRE’s London development team. And David Jubb has also had a good start to the year, having been appointed by JLL to head it’s new Greater London residential development team. Beautiful bounty It could be a great 2016 for whichever agent wins the mandate to oversee L’Oréal’s potential 200,000 sq ft requirement. Three agents are apparently pitching for the work, no doubt trying to prove they are”worth it”. Colliers on the lookout? While on the subject of agencies, Colliers International has snapped up niche midtown firm Hatton Real Estate – and judging by the rumours circulating the market, the appetite among other agencies for acquisitions has yet to be sated. London’s most wanted Whoever wins the London mayoral race in May (Sadiq Khan, left, is the Labour candidate) they will be faced with quite a lengthy wishlist of priorities. The GLA’s planning committee not surprisingly wants planning on the agenda and in particular a long-term strategy to plan for increasing density. (See what our Forum thinks here). Will Boris make it to MIPIM? Talking of the mayor, Boris Johnson that is, rumours are already circulating as to whether he will be at MIPIM this year. He may not have long to run in the post, but as we know he has wider ambitions and will no doubt be keen to shake off the London mantle for something with a broader UK appeal. MIPIM, where all the key UK cities tend to congregate, might be an opportunity he can’t miss – so don’t rule out a no-show just yet. Cycle of contention Transport For London has upset London’s cab drivers with its east to west cycle superhighway. The Licensed Taxi Drivers Association is taking the public body to court, claiming it does not have appropriate planning permission for the scheme, which is already nearing completion. Hotels try harder The Rugby World Cup helped boost London’s hotel occupancy in 2015, raising profitability by 2% year-on-year – contra to predictions at the start of the year. Flagships fly in Since January 2014, 11 flagship stores have opened on Oxford Street with a further 26 expected to open by 2019. Blossoming development London mayor Boris Johnson approved British Land’s plans for a 350,000 sq ft development on Blossom Street after they were rejected by Tower Hamlets council. The Office Group is in negotiations to pre-let 52,000 sq ft Towering approval CNM Estates has been granted planning permission by Kingston Upon Thames council for its £300m redevelopment of Tolworth Tower. Record rents Prime central London retail rents jumped 9% in the last quarter of 2015 – the fastest growth since 1988, according to CBRE research. CBRE hattrick CBRE is the firm to beat in 2016 having topped EGi’s London office league tables for leasing, acquisition and investment last year. Canary Wharf loses lawsuit Canary Wharf Group has lost a £168m lawsuit over its securitised real estate portfolio. The EG London team gauges the trials and tribulations of the capital’s property market