This Week's London Deal Sheet
The Deal Sheet is a weekly compilation of Greater London and beyond's biggest leases, sales, financing deals, construction updates and personnel moves. Have news you’d like to submit? Email [email protected].
Pembroke has pre-let 114K SF at the 41 Lothbury office building in the City of London to law firm Addleshaw Goddard.
Addleshaw Goddard will occupy the space on a 15-year lease and work alongside developer Pembroke, its construction partner Wates Construction and architectural practice Stiff + Trevillion to transform the Grade II-listed former bank premises into a turnkey solution that allows the law firm to relocate in 2024.
The building’s former banking hall will be repurposed to create flexible breakout spaces, enhanced by a Jason Bruges light installation. Other amenities will include new end-of-trip facilities, as well as a repurposed rooftop with outdoor terraces offering views of the City of London to help promote employee wellbeing.
The refurbishment of 41 Lothbury will be an example of working within an existing building structure and reusing existing materials to enhance an office asset and reduce carbon emissions.
This will be achieved by transforming 41 Lothbury into an all-electric building, with energy provided through air-sourced heat pumps allowing the building to achieve NABERS accreditation and contributing to Pembroke’s objective to be net-carbon zero by 2035. 41 Lothbury also hopes to secure a BREEAM Excellent rating and Platinum Wired Score.
SALES
Landsec has exchanged contracts for the sale of 21 Moorfields, EC2, to an investment vehicle managed by Lendlease. The total consideration for the sale amounts to £809M, a 9% discount to its valuation in March. After outstanding development-related items, that results in a net cash receipt to Landsec of £733M. Rothesay is providing financing for the acquisition with a 10-year senior term loan.
21 Moorfields is a 569K SF London office development fully pre-let to Deutsche Bank on a 25-year lease, with an annualised net rent of £38M. Built directly above Moorgate station, the asset is targeting sustainability ratings of BREEAM Excellent and LEED v3 Gold.
Landsec will retain the responsibility for completing the development, with practical completion expected in Q1 2023. Lendlease will manage the investment vehicle, on behalf of its investment partners, including Australia’s TCorp, and its own minority interest.
The sale crystallises an anticipated development profit of £145M, representing 25% profit on cost.
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Blackstone and Bourne Leisure have agreed to the sale of Butlin’s, the British seaside resorts business, to a newly formed company backed by the Harris family for about £300M.
Butlin's was founded in 1936 by Billy Butlin, who opened the first site in Skegness with the aim of revolutionising British seaside holidays and providing a "place of colour and happiness" to be enjoyed by all. Today, it operates three resorts in Minehead, Bognor Regis and the original site in Skegness, which together attract more than 1.5 million guests every year.
Blackstone acquired Butlin’s parent company, Bourne Leisure, from the founding Harris, Cook and Allen families in January 2021. As part of the transaction, the families co-invested alongside Blackstone, and together hold a minority stake in the business. Upon completion, Bourne will continue to operate its two heritage brands, Haven and Warner Leisure Hotels.
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Tristan Capital Partners’ CCP 5 fund, along with its joint venture partner Bricks Group, has acquired a 999-bed purpose-built student accommodation asset in the city of Liverpool from Aura Investors for £110M.
This latest acquisition expands the joint venture’s PBSA platform to more than 2,100 beds located in Birmingham, Manchester/Salford, Glasgow, and now Liverpool. All are managed by Bricks-owned platform, true student.
LEASES
Orchard Street Investment Management has completed two lettings at its newly refurbished Mortimer Street office building in London’s Fitzrovia, leasing more than 13K SF across three floors and taking the scheme to full occupancy.
Security and artificial intelligence specialist Helsing has agreed to take 7.6K SF of Category A office space across the fourth and fifth floors of the building on a 10-year lease and will be taking more space than it occupied at its previous location in line with the company’s growth plans. Boutique commercial law firm Wallace has taken about 5.5K SF across the second floor, also on a 10-year lease, and will utilise the fully fitted space for its London HQ.
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Stanhope and Cadillac Fairview have leased 29K SF at White City Place to broadcasting solutions firm Gravity Media.
Gravity Media is taking space in the WestWorks building with the launch of its second London production centre later this year, part of its continuing expansion. The new production centre will showcase highly specialist technical facilities, and will join Gravity Media’s current other global centres in London’s Chiswick, Manchester, Sydney, Melbourne and San Francisco. The BBC and ITV also occupy space at White City Place.
CONSTRUCTION AND DEVELOPMENT
Ashby Capital and Native Land have secured planning consent for the transformation of 105 Judd Street into 70K SF of lab-enabled workspace near King’s Cross station.
The project aims to meet the increasing demand for flexible and adaptable laboratory and office space from life sciences and technology businesses. Its lab-enabled specification allows for easy conversion of floors from offices to labs.
The creative reuse of the building will see 75% of the existing fabric retained and restored, while comfort and energy performance are bought up to class-leading contemporary standards. A two-storey extension will increase the available net floor area from 55K to 70K SF.
FINANCING
Aviva Investors has provided £105M of refinancing to South African specialist industrial REIT Equites Property Fund secured against a portfolio of five regional distribution assets across the UK.
The investment was made on behalf of Aviva UK Life’s annuity business. As part of the agreement, Aviva Investors has increased its existing facility with Equites, which completed in December 2019, and extended the loan term to 2032. The funding will be used by Equites to refinance the development of Colossus, a 340K SF distribution hub near Barnsley, for multinational delivery company Evri.
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Puma Property Finance has provided a £33M development finance facility for Mountbatten House, an office in Basingstoke.
The development will see the transformation of a Grade II-listed building into a sustainable workspace with a wellness offering and extensive amenities. The project is being led by developers Longstock Capital and Mactaggart Family & Partners, with works having commenced earlier this month.
The six-storey development was originally occupied by paper manufacturer Wiggins Teape and comprises 150K SF. The new development will have a high focus on sustainability, designed to achieve an EPC A rating, BREEAM Outstanding, WELL Platinum and Wired Score Platinum certifications.
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Debt fund manager M7 Capital has provided a £16.3M loan to Willow Nominees Limited. The loan is secured against two modern retail parks and a shopping centre comprising multiple units extending to a total of 221K SF, which are 100% let to a mixture of national brands and local businesses. The loans were made on behalf of M7’s UK debt fund TREC II.
The properties, which are located in Manchester, Inverurie and Wrexham, are managed by David Samuel Properties Limited, a specialist purchaser of commercial real estate assets across the UK with current assets under management in excess of £400M.
THIS AND THAT
Following approval from the Competition and Markets Authority, TOG and Fora have completed their merger, bringing together two of the UK’s largest flexible office providers into a new business valued at about £1.5B.
The merged business will operate under a parent company called The Office Group, with both the TOG and Fora brands retained until a full brand review is completed.
The combined company comprises 72 locations totalling 3.1M SF across London, Cambridge, Oxford, Reading, Bristol, Leeds, Berlin, Frankfurt and Hamburg. TOG has recently opened a number of new workspaces, including TOG at Borough Yards and 210 Euston Road, as well as Linden Palais in Germany, while Fora has added Greencoat Place in Victoria to its offering.
Enrico Sanna has been appointed CEO of The Office Group. Joining Sanna in leading the combined business will be TOG’s two co-founders, Olly Olsen, as executive chairman, and Charlie Green, as president. Sanna’s Fora co-founder, Katrina Larkin, will take the role of chief environment, social and governance officer.
