The last time tenants were shown around 22 Bishopsgate, EC2 – would-be site of the Pinnacle – at the end of 2011, their options for alternative tower floors in the City looked very different.
The rapidly rising Cheesegrater, EC3, had just secured its first letting, the Walkie Talkie, EC3, was entirely unaccounted for and the completed Heron Tower, EC2, was still more than half empty.
But when British Columbia Investment Management Corporation, PSP, Temasek and Axa – the new owners of the site – next come to make presentations, the competition will be very different.
The trio of former rivals are now well on their way to being fully let, with the Walkie Talkie at over 90%, the Heron Tower over 85% let and the Cheesegrater around three-quarters full.
But contrary to then-planning officer Peter Rees’ prediction in 2012 that significant additions to the emerging City cluster were unlikely for a generation, the competition today arguably looks even fiercer now a deal to buy the site has finally been agreed for an eye-watering £300m.
Even if the consortium really does manage to get planning this year and commit to a spec start, it has already been overtaken by a crop of new competitors, as the new London model on show at next week’s MIPIM conference in Cannes will confirm.
Just down the road, 100 Bishopsgate, EC2, poses the biggest challenge to 22 Bishopsgate’s new owners.
Boasting a similar volume of office space, crucially, it is now 100% owned by Brookfield.
Great Portland Estates’ sale of its final 12.5% stake in the project late last year was significant, indicating as it did that the West End landlord felt it likely Brookfield would commit to the project based on a lower level of prelet – a fact Brookfield has since confirmed.
With planning, site clearance and some ground works in place, the scheme is ready to spring to life at the first sign of a prelet of as little as 200,000 sq ft and delivery is still just about possible in 2018 – which would put it in direct competition with 22 Bishopsgate.
Another former rival which looks set to mount a fresh challenge thanks to its partially changed ownership is the Can of Ham at 60-70 St Mary Axe, EC3.
TIAA CREF’s tie-up with Henderson Global Investors gives it the development expertise required to get a scheme of this nature off the ground.
Furthermore, it has now agreed a lease surrender with tenant Threadneedle that will shortly give it vacant possession, paving the way for a potential start on site later this year.
TIAA Henderson is also sitting on another potential tower project, the awkwardly nicknamed Gotham City at 40 Leadenhall Street, EC3.
The scheme has planning in place but there are still rights of light and other issues to resolve, meaning it is unlikely to be ready to start this year even if tenant demand emerges.
Axa announced it planned to submit a planning application for 22 Bishopsgate within the “next few months” when it exchanged contracts for the Pinnacle site on 22 February, meaning it could end up in front of the City’s planning committee at the same time as another new rival.
Mitsubishi and Stanhope are shortly expected to submit plans for their site at 150 Leadenhall Street and 6-8 Bishopsgate, EC3, following the all-clear
from English Heritage last month, which chose not to list the existing structures.
They are expected to submit Wilkinson Eyre-designed plans for a tall tower next door to Axa’s scheme and while demolition cannot take place until leases expire in December 2015, there is every chance the two schemes will end up competing for tenants.
Meanwhile, Stanhope and Mitsui Fudosan are well on the way with their overhaul of Angel Court, EC2, which will provide 300,000 sq ft of office space by June 2016, making it the most advanced of any of the towers, albeit not an entirely new one.
WR Berkley Development Corporation is also significantly more advanced, with its 35-storey Scalpel at 52 Lime Street, EC3, now on site and due to deliver another 400,000 sq ft of available office space in the final quarter of 2017.
But before Axa et al even come to face their new competition, there is another hurdle they must navigate.
Their revised scheme – early iterations of which were leaked on the internet to a less than enthusiastic audience – must re-navigate the City planning committee, which is a very different beast to the one guided by Rees back in 2012.
A largely new line-up of members on the committee and a new planning officer in Annie Hampson has ensured that converting recommendations for approval to actual consents is no longer a foregone conclusion.
Generation 2020 takes shape
The Indonesian owners of the Aviva Tower have appointed architect Eric Parry to come up with designs for a new super-tall structure next to the Cheesegrater, while Brookfield has asked Make Architects to devise a scheme at Leadenhall Court, EC3.
They could be joined by Lai Sun, which has acquired 100 and 106 Leadenhall Street, EC3, giving it control of almost an entire block next door to the Gherkin, which has the potential for a tower once leases expire by 2025.
Axa is also sitting on an island site behind the Heron Tower after it bought Camomile Court and 63 St Mary Axe, EC3, last month.
Read an analysis of the Pinnacle acquisition here
See the updated New London Development app at www.newlondondevelopment.com
jack.sidders@estatesgazette.com
