British Land, the FTSE100-listed developer today surprised the markets by announcing that the UK’s leading department stores group, Debenhams plc has signed terms to pre-let 145,000 sq ft of office space at 10 Brock Street, in what is likely to be one of the largest deals in the West End office market this quarter. The 320,000 sq ft office building forms part of the London-based developers North East Quadrant (NEQ), which commenced construction almost a year ago, itself part of the wider Regent’s Place estate – an impressive two million sq ft mixed use development, masterplanned by Terry Farrell and Partners.
Debenhams, who earlier today announced solid sales growth in line with analyst expectations, currently occupy 1-2 Welbeck Street in the heart of London’s West End for their UK head office, which sits handily opposite the rear of the firm’s flagship Oxford Street store. The groups’ current lease, which costs them approximately £1.43m per annum, expires in 2013 at which point they will move the short distance up the road into 10 Brock Street, having agreed to occupy the ground to fourth floors on a 25-year lease without break.
For British Land it is yet another high-profile occupier to add to the impressive list of firms already located across the Regent’s Place estate, which is 98% let to the likes of the Russian energy company, Gazprom and Aegis Media. Debenhams will occupy about 40% of the Brock Street office building, which is due for completion – incidentally by one of the estates biggest tenants, Lend Lease – in summer 2013. Designed by the Clerkenwell-based, Wilkinson Eyre Architects, the 320,000 sq ft office scheme is planned around the concept of three glass towers of eight, ten and sixteen stories, linked by bridges across two full-height atria – a far cry from Debenhams’ Welbeck Street site.
Rental terms have not been disclosed but are likely to be in-line with recent West End letting deals of around £65.00 per sq ft, although Debenhams may have been able to extract a better deal given the commitment to an impressive 25-year lease without break. British Land also today confirmed that around 70% of the 172 luxury apartments within the Stephen Marshall Architects-designed block have been pre-sold to buyers. The 25-storey tower is to be clad with an innovative basket weave of aluminium, with the development set around a central courtyard that also makes use of novel maze landscaping.
Debenhams’ Welbeck Street site, which was purchased off-market for £36m in March this year by the Scottish Widows Investment Partnership (SWIP) on behalf of Scottish Widows Unit Funds, is itself due for redevelopment, with planning permission granted by Westminster City Council for a 53,100 sq ft mixed use scheme. The existing early-1960’s building will be demolished - with the exception, somewhat bizarrely of part of the facade that fronts a listed staircase - to be replaced with a new nine-storey building.