Plans for a major office development which is under offer to law firm DLA Piper have been rejected by the City of London.
Mercer Real Estate’s plan to refurbish and extend Mitre House at 160 Aldersgate Street, EC1, is the first major application the City has rejected in more than 18 months.
DLA Piper agreed terms to lease the entire circa 200,000 sq ft office space proposed at the start of this summer, helping shape the final Fletcher Priest-designed scheme ahead of its submission in August.
A source said: “The rejection is a blow but it won’t unseat the deal straight away because DLA has plenty of time on its existing leases.”
Mercer is expected to appeal the decision pending the formal reasons for rejection being issued by the City of London.
The committee’s decision to reject the plans came despite a recommendation to approve from City planning officer Annie Hampson.
However, the scheme faced substantial opposition from local residents, with concerns ranging from the building’s height to the loss of light it would cause and the potential noise pollution from the proposed roof terraces.
Mercer bought the 188,675 sq ft building for £64m in October last year.
It is one of several private equity firms that have piled in to the City office market, targeting large office buildings that can be quickly refurbished and relaunched to market over the next few years, during which time rents are forecast to rise substantially.
Plans by Blackstone – the largest investor pursuing this strategy – to refurbish and extend 20 Old Bailey, EC4, were this week registered by the City of London. At the same committee meeting this week, the City approved a pair of major redevelopment schemes: the 383,819 sq ft Bevis Marks House, EC3, submitted by Fairplay Estates; and the 145,850 sq ft Scandinavian House at 2-6 Cannon Street, EC4, submitted by Pembroke Real Estate.
A pair of large applications, including the 150,000 sq ft PLP Architects-designed Crossrail over-site development at the eastern ticket hall of Farringdon station, were postponed to a special planning meeting on 15 December.
