Yesterday BL reported its first quarter results up 30 June, announcing that the property developer plans to add 2.2m square feet of office space by 2014 in central London, in response to the shortage of space that is driving up rents. The firm has committed £1.9 billion to investment across all property segments in the last 18 months with nearly 90 per cent in Central London and retail, the announcement said.
Chris Grigg told a news conference that “Our focus on high quality retail and London offices continues to drive strong valuation and improvement in rental values.”
British Land also reported that across Q1, development values had risen by 10 per cent and that it will press ahead with its £1.1bn office development pipeline that includes ‘the Cheesegrater’ skyscraper in the City of London.
British Land had recently confirmed that Aon Corp. (AON) has agreed to lease almost a third of the Cheesegrater, its 47-story skyscraper being built in London's financial district. Aon, the global insurance corporation, will occupy 191,000 square feet in the Leadenhall Building, taking up 10 floors of the 736-foot (224-meter) tower. The tower will rise alongside the Gherkin at St Mary Axe and has been given a similar culinary moniker the Cheesegrater because of its tapered design.
The developer, in an update to investors, said that the construction contract for The Leadenhall Building had been “agreed on favourable terms (vs budget and timetable)”.
Meanwhile, planning has also been granted for the redevelopment of 5 Broadgate, where the firm is due to build a £340 million trading and general offices for bank UBS.
The BL financial results served to confirm that prices for London office buildings have now recovered since August 2009, as the weak pound has attracted demand from overseas investors and a shortage of large new offices lifts rents.