Canadians join British Land to build the 'Cheese Grater'

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The Independent Online

British Land is to team up with a Canadian fund manager to develop a Lord Richard Rogers-designed skyscraper in London's Square Mile.

The UK's second-largest property company is in advanced negotiations with Oxford Properties jointly to develop its tower at 122 Leadenhall Street – dubbed the "Cheese Grater".

Oxford Properties is the real-estate arm of Ontario Municipal Employees Retirement System (Omers) pension fund, one of Canada's largest pension plans. It provides pension services to more than 400,000 active and retired members and has more than C$48bn (£29.8bn) of assets under management.

It is thought British Land, headed by former Barclays banker Chris Grigg, could make an announcement as early as next week confirming the deal.

The 225m Cheese Grater, so called because of its wedge-shape design, will provide 610,000 square feet of office space, and its estimated build costs are more than £250m. News of another potential development-funding arrangement follows the news earlier this week that Land Securities had finalised a £500m deal to develop its "Walkie-Talkie" tower at 20 Fenchurch Street in a consortium with Canary Wharf Group, the Chengdong Investment Corporation, Morgan Stanley Real Estate, and Qatar Holdings.

If an agreement is finalised between Oxford Properties and British Land, which is advised by DTZ, it will further cement the growing Canadian interest in London's property market. Investment funds such as the Canada Pension Plan and the Healthcare of Ontario Pension Plan are investing in London property.

Omers already has £2.5bn of investments in the UK property andinfrastructure markets and holds stakes in Associated British Ports and Scotia Gas Networks. It plans to invest more than £2bn in property and infrastructure assets in the UK and continental Europe by 2012.