Japanese developer Mitsubishi Corporation is preparing to join the speculative revival in the City with a 160,000 sq ft office-led development.
Mitsubishi is close to agreeing terms with Stanhope to form a development partnership for its Bow Bells scheme on a site bound by Cheapside, Bread Street and Watling Street, EC4.
The official line is that Mitsubishi has yet to decide what to do with the scheme, which includes 20,000 sq ft of retail, but sources said it had agreed to start work in March without a prelet. Completion is scheduled for the beginning of 2007, when agents are predicting that a shortage of stock will cause rent rises.
Mitsubishi bought the site from Legal & General for £70m in 1988 and won planning permission for the HOK International Architects design in 2001. The 1950s office block on the site has been vacant since 2002. A number of partners have been cited to develop with Mitsubishi.
The decision comes as Land Securities served notice on its tenants at 120 Cheapside, EC2. This could kickstart its 185,000 sq ft office and retail development, which got consent in October.
LandSec also plans to develop another scheme on the road, which is seen as one of the most important retail thoroughfares in the City.
It is working up proposals for a 900,000 sq ft Jean Nouvel-designed scheme at One New Change, EC4, while St Martins Property Corporation has plans to develop a 200,000 sq ft scheme at 150 Cheapside.
Only a small number of City schemes are scheduled to be complete in 2006, so this year Scottish Widows and Teachers decided to speculatively carry out its 275,000 sq ft scheme at Royex House, Aldermanbury Square, EC2.
Prudential also decided to start work on its 200,000 sq ft office at 16-18 Finsbury Circus, EC2, and the adjoining 26-31 Eldon Street without a prelet.
According to CBRE, 2004 take-up in the City is expected to be in excess of 4m sq ft, a 25% increase on 2003.
References: EGi News 13/12/04
