The number of refurbishments and minor redevelopments in the City of London is rising as investors put off selling in an uncertain market.
Stanhope is the latest developer to announce a large-scale refurbishment, having been appointed on the 211,000 sq ft 31 Gresham Street, EC2, following Schroders’ departure to a new HQ in Land Wall Place, EC3.
Savills estimates that around 2.5m sq ft is being refurbished in the City, against a five-year average of 1.4m sq ft. During the 2008 downturn there was a similar trend, with owners reverting to asset management to boost rents and future sales values.
Other large refurbishments include 238,227 sq ft by Blackstone at 20 Old Bailey, EC4; Mercer’s 202,000 sq ft at 160 Aldersgate, EC1; and Greycoat and Ivanhoe Cambridge’s 269,060 sq ft at 3 Minster Court, EC3.
Mat Oakley, head of commercial research at Savills, said: “We expect to see continuing interest in refurbishments in the City of London. They offer a higher degree of certainty in a rapidly evolving market and are increasingly popular with tenants looking either for cost-effective or creative looking space.”
Stanhope was chosen as development manager at 31 Gresham Street by AAFIA Swiss Foundation for International Real Estate Investments. It will first conduct a feasibility study on the scope of the refurbishment.
It is eyeing a range of options, ranging from a minor internal reconfiguration to increasing the space by 10%. Owing to St Paul’s height restrictions, it is not possible to raise the height of the building or change the exterior.
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