Development works to progress on new office development in the City of London.
Mitsui Fudosan UK and Stanhope have completed the purchase of the 70 Mark Lane development site in the City of London for £19.5 million, in a 90%/10% JV.
The property which sits in the St Olave's conservation area has planning consent for a new glass-curtain-wall fifteen-storey building, offering 177,000 sq ft (net internal area) of prime office and complementary retail space, with a total development cost of circa £100 million (excluding notional interest).
The island site scheme is designed by Bennetts Associates and will offer a generous reception area, high spec and efficient floor space, and magnificent views of the Tower of London and Tower Bridge. The scheme is targeting a BREEAM Excellent rating.
Mitsui Fudosan and Stanhope will work together with the Drapers' Company and the City of London, who also own freeholds within the site, to finalise pre-construction matters with the aim of delivering the completed building in 2014.
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Construction to commence on new office-led development in the City of London.
Mitsui Fudosan UK has purchased the long leasehold interest in 8-10 Moorgate in the City of London, for £30.8 million, from Schroder Property Investment Management. Mitsui Fudosan has also simultaneously entered into a new 175-year Head Lease and Development Agreement with freeholder The Clothworkers' Company for the site, bounded by Moorgate, Telegraph Street, Kings Arm Yard and Tokenhouse Yard.
Working alongside development partner Stanhope, Mitsui Fudosan has this week commenced work on the £80 million project (excluding notional interest), with demolition now underway and subsequent construction works to commence in April next year. Practical completion is anticipated in December 2013.
The property sits within the Bank Conservation Area and has planning consent for a new eight-storey building behind a retained Victorian façade, offering 132,000 sq ft (net internal area) of prime office and complementary retail and residential space. The scheme benefits from a generous dual-entrance reception area, highly specified and efficient office floors, and significant open-air terrace space on the upper floors. The scheme is designed by Allies & Morrison and is expected to achieve a BREEAM Excellent rating.
Having monitored this development opportunity for several years, Mitsui Fudosan moved swiftly after the Eurozone crisis intensified in the past few months, concluding the transaction within a month of submitting the initial offer. Mitsui Fudosan is now actively pursuing other new investment opportunities in Central London, in accordance with the Group's objectives of global expansion, with London being a key strategic market.
Mitsui Fudosan is currently constructing 5 Hanover Square, a new mixed-use development in Mayfair which is under construction and scheduled to complete by March 2012. 8-10 Moorgate will be its second project in London since it announced its expansion into the London development market in 2006 by forming a partnership with Stanhope.
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Mitsui Fudosan UK has agreed to lease the entire retail unit on the ground and lower ground floors of the mixed-use development at 5 Hanover Square, W1 in London to the internationally renowned contemporary art specialist, Blain Southern Gallery.
The Mayfair development is being carried out by Mitsui Fudosan together with its UK partner Stanhope PLC, in which Mitsui Fudosan UK is a 15% shareholder. Construction on this new-build scheme commenced in December 2010, and practical completion is expected in the first quarter of 2012.
The proposed gallery comprises 12,400 sq ft situated on the prime corner of Hanover Square and Hanover Street. Blain Southern Gallery has taken a 15 year lease on confidential terms.
The 7 storey building will also house 45,500 sq ft of high quality office space with a linked building offering five residential apartments including a 2-storey penthouse which are being developed speculatively and are not yet being marketed.
Hideto Yamada, Managing Director of Mitsui Fudosan UK, commented: "We are delighted to announce our first future occupier in this development. Our objective is to create a top quality office, retail and residential building which will provide long-lasting value to end-users and the surrounding community, and we decided that the contemporary art gallery will be an anchor for the ongoing development and deliver optimal value for the entire building."
David Camp, Chief Executive of Stanhope PLC said: "The Blain Southern Gallery will be the perfect use for this prime Mayfair location and will be an attractive and complementary neighbour for the future office and residential occupiers of the development."
Harry Blain of Blain Southern commented: "5 Hanover Square is a superb development and we are delighted to be a part of it. It is a successful conclusion to our search for significant central London gallery premises. As a totally new development, it allows us to offer the artists we work with a custom built and designed gallery space in which to stage exhibitions."
Steven Stedman at CBRE acted for Mitsui Fudosan UK and David Rosen at Pilcher Hershman represented Blain Southern.
