British Land and Blackstone secure 400,000 ft² of lease extensions and new lettings (UK)

British Land and Blackstone have secured four significant leasing deals at Broadgate, the City of London's premier office estate. The combined effect of these deals is to add one year to the current weighted average lease length of Broadgate, to 8.5 years to first break or 10.3 years to expiry (as at March 31, 2012).

This follows the recent 830,000 ft² (approx. 77,000 m²) of lease extensions with UBS which facilitated their move to the 700,000 ft² 5 Broadgate, which is let to UBS for an average of 18.2 years and will materially further add to the estate's weighted average lease length.

The recent deals have been signed with:

  • Major international legal practice Herbert Smith, which has regeared its leases at Exchange House and 10 Exchange Square. Herbert Smith will now occupy 315,000 ft² of office space for an extra 10 years to 2030. Herbert Smith will also benefit from further options to expand within these buildings.
  • F&C Asset Management (F&C), which has regeared its leases at Exchange House. F&C will occupy 54,000 ft² of office space across levels seven and eight for a 15-year term until 2027. The rent on level eight will remain unchanged, while on level seven it is subject to a minimum uplift to £48.50 per ft².
  • Combined, these regears increase the weighted average lease lengths to first break at Exchange House and 10 Exchange Square to over 15 years and 10 years respectively.
  • Brazilian banking group Banco Itau, which has agreed to lease an additional 12,000 ft² of office space at level 19 of The Broadgate Tower. It is taking a 8.75-year term at £54.50 per ft² with 22 months' rent free. Banco Itau moved into the Broadgate Tower in December 2010, originally letting 13,000 ft² at level 20 of the building.
  • Japanese trading company Itochu, which has also agreed to take an additional 6,000 ft² of space at The Broadgate Tower. The letting, at level 18 of the tower, is at a headline rent of £62.50, with 18 months' rent free for a term until December 2020. Itochu moved into the Broadgate Tower in November 2010, originally letting 26,000 ft² across levels 15 and 16.

Tim Roberts, Head of Offices at British Land, said: "These deals demonstrate how we are working with our existing occupiers to help them consolidate and grow in challenging conditions. We are delighted that long-standing and key customers, Herbert Smith and F&C, are committing to Broadgate for the longer term. The lettings by Banco Itau and Itochu are also a positive example that international corporates are keen to expand their presence at Broadgate, taking advantage of the high quality office space and first class amenities and services on offer."

The 35-story, 397,000 ft² Broadgate Tower is the City's fourth tallest building rising to a height of 165 m (540 ft). Its current occupiers include Reed Smith LLP, Greenlight, and William Blair.

Exchange House is a 384,000 ft² office building on the Broadgate estate. The building is currently occupied by F&C Asset Management, Herbert Smith and Société Générale.
10 Exchange Square is a 165,000 ft² office building adjacent to Exchange House on Broadgate. In addition to Herbert Smith, the building's occupiers include Close Brothers Asset Management, Esemplia Emerging Markets and Western Asset Management.

Source: British Land

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