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An ambitious office space development in the City of London is now set to get under way in earnest after a crucial pre-let deal was agreed between British Land, Blackstone and the banking group UBS.
The development firm British Land and the investor Blackstone have been working via a joint venture to see 700,000 sqft of offices built at 5 Broadgate in central London, with their plans now set to proceed after UBS committed to occupy the entire property.
Buildings at 4 and 6 Broadgate are currently being demolished, with British Land expecting to see construction of the new office tower established in their place before the end of 2014.
“This is another significant milestone in the development of the new UBS building at 5 Broadgate and a real boost for the City,” said Tim Roberts, head of offices at British Land. “The Broadgate estate continues to evolve to serve the needs of a range of city occupiers and the 30,000 people based there.”
The leasehold arrangement agreed between UBS and the joint venture behind the scheme entails the Swiss banking group deferring lease break options on three of its other office bases in central London and paying £54.50 per square foot.
Terms of deal also mean the bank will be given an 18-month rent-free occupancy period and the building will be fitted out in line with its specifications.
British Land is among the largest property developers in the UK, with an office space portfolio valued at close to £5 billion. Its buildings are located in either the City of London of the West End in line with its strategy of focussing purely on “prime assets” in the capital.
UBS has a sizeable presence in the City of London but the banking group hit the headlines in mid-2012 after it emerged one its UK-based traders had been engaging in unauthorised activities that led to losses worth over £1 billion.