Great Portland Estates plc (GPE), in conjunction with the City of London Corporation, announces that it has pre-let 142,500 sq. ft. in its development at 12/14 New Fetter Lane, EC4 to top 20 international law firm Bird & Bird.
Pre-let Eliminating Risk
In 2012, we pre-let our development at 12/14 New Fetter Lane to Bird & Bird, a top 20 international law firm. Bird & Bird agreed to lease the entire 12-storey office building through four 20.25-year leases, without breaks, paying an initial rent of £8,279,000 p.a., equating to an average of £58.80 per sq ft.
The space was designed to allow greater integration and collaboration, offering Bird & Bird an impressive client reception, hospitality and meeting space, providing them with the opportunity to offer a range of functions to visiting clients. In 2017, 12/14 New Fetter Lane was shortlisted for the BCO Commercial Workplace project of the year, London region.
12/14 New Fetter Lane achieved a BREEAM Excellent with a score of 76% and outperformed BREEAM requirements on water consumption by 40%, equating to an estimated saving of 17 litres per person per day. Other initiatives included the installation of solar panels at roof level to pre-heat the domestic hot water, enhanced on-site ecology and on-floor plant solutions to reduce the building’s embodied carbon. During its construction, the building site was awarded the Considerate Constructors Scheme Gold award for two years running.
In November 2014, with the building fully pre-let to Bird & Bird, we took the opportunity to forward sell our 151-year leasehold interest in 12/14 Fetter Lane to TIAA Henderson Real Estate for a price of £165.8 million, reflecting a yield of 4.5%. The agreed site price of £92.8 million, based on a completion in December 2014, was some 15.5% ahead of valuation.
Toby Courtauld Chief Executive, Great Portland Estates
This sale continues our strategy of recycling capital out of assets, where we have created significant value and back into our exciting 2.2 million sq ft development programme. 12/14 New Fetter Lane has been an exceptional project for us. Having secured an attractive planning permission, re-geared the headlease with the City Corporation and fully pre-let the building, this sale crystallises a return on capital since committing to the scheme of 82.7% and an unlevered IRR of 55.1%.
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