Hammerson's proposed £350m Principal Place skyscraper in London was dealt a major blow yesterday, as the main potential tenant walked away from the scheme, blaming financial uncertainty.
The developer had been in talks with the law firm CMS Cameron McKenna over letting part of the 50-storey, 850,000 sq ft tower on the fringes of the City and Shoreditch since last summer. But McKenna has decided to stay at its current offices and look at alternative options nearer the time of its lease expiry in 2015.
Meanwhile, new data from the Investment Property Databank, the benchmark index for UK property, showed values weakened in 2011 and the outlook for 2012 was "less than ideal". London developers are looking to exploit a shortage of top-quality offices in the City district but have struggled to attract tenants. Five central London skyscrapers being developed by firms such as Land Securities and British Land have only signed one office pre-let deal between them.