British Land defeats English Heritage at battle of Broadgate
Thursday 16 June 2011
The Culture Secretary has turned down a request to list Broadgate in the Square Mile, clearing the way for British Land to redevelop part of the City estate for UBS's new European headquarters.
English Heritage, the body charged with protecting national monuments, had asked Jeremy Hunt to consider listing the 1980s complex, which was built around the same time as the Margaret Thatcher government implemented the so-called "Big Bang" reforms that deregulated the City and financial markets.
But Mr Hunt said Broadgate "does not meet the stringent criteria of historic or architectural interest required to be added to the statutory list".
A letter from the Department for Culture, Media and Sport informing English Heritage of the decision, said: "[The Culture Secretary] is persuaded that the building's architectural design, decoration and craftsmanship is impressive, but not to the extent that it meets the high bar of outstanding quality."
The complex was built in 1985, just one year before the Thatcher government pushed through reforms that included allowing foreign groups to purchase UK stock market firms. The site, a stone's throw from Liverpool Street Tube station, has been home to financial firms such as UBS and Royal Bank of Scotland, and is the place of work for over 30,000 people.
In 2009, British Land sold half of the complex to the private equity group Blackstone. The deal was followed by news last summer that the Swiss investment bank UBS, already the largest tenant, had agreed to locate its new European headquarters on the site.
The plan, which will see the banking group pay a headline rate of £54.50 per square foot on a weighted average lease of around 18 years, calls for the demolition of two existing buildings – number 4 and 6 Broadgate – and their replacement with a new unit with more than 700,000 square feet of floor space.
The plans were put in question by English Heritage's decision to recommend listing, something that would have precluded the demolition of the two buildings. But yesterday, British Land's chief executive Chris Grigg welcomed the Culture Secretary's move.
"It allows Broadgate to continue to evolve as a sustainable and flexible office location that will meet the future needs of occupiers whilst maintaining the sense of space and place for which it is rightly renowned around the globe," he said.
"With the decision made... by Jeremy Hunt, the Government has also sent out a message loud and clear to the world that the UK is open for business," Mr Grigg added.
The Broadgate redevelopment comes against the backdrop of a boom in the London office market as property companies seek to play catch-up with rising demand. Numerous projects were put on hold when the financial crisis struck. But while the recovery in corporate activity has led to a revival in demand, the amount of new space coming on the market remains limited.
The gap has supported rents, and spurred developers. Land Securities, for instance, recently said it was planning to push ahead with a speculative building spree to make the most of the expected shortage in office space.
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