British Land deal is a ‘vote of confidence’ in the London office market

One of Britain’s largest landlords hailed a major ‘vote of confidence’ in the London office market after letting almost one third of a flagship development.

British Land has leased 134,000 sq ft at One Broadgate in the heart of the City to global property agent Jones Lang LaSalle (JLL) for 15 years in what is thought to be one of the biggest deals in the capital this year.

JLL will move into its new offices after the redevelopment is completed in 2025.

British Land has leased 134,000 sq ft at One Broadgate in the heart of the City to global property agent Jones Lang LaSalle (JLL) for 15 years

The deal covers nearly 30 per cent of the site’s available space, spanning three floors.

European investment giant Axa also revealed it has raised hundreds of millions of pounds to plough into new office space across the UK, France and Germany.

Ian Chappell, head of development and value-added funds at Axa IM Alts, said the plan signalled a belief that ‘there’s a future for offices’. 

It represents a major bet that workers will by and large return to working in offices for at least a few days a week, after many have done their jobs entirely from home during the pandemic. 

British Land is also seeking to attract law firm Allen & Overy to the Broadgate site, according to Bloomberg, in another lease for potentially 300,000 sq ft.

Boss Simon Carter said: ‘We are thrilled that JLL has chosen this fantastic building for its new UK flagship office. The move is a real vote of confidence in London.’

Others seem to agree according to research by property firm CBRE, which found that new offices were the main target of more than one third of investors – and that London was in demand.

David Solomon, boss of Goldman Sachs, has claimed that home working during the pandemic was merely an ‘aberration’ and that the investment bank will be calling staff back to its buildings as soon as it can safely do so.

However, rival banks HSBC and Lloyds have both said they will slash office space after the pandemic recedes, as well as consultancy firms such as Grant Thornton and PwC.

And on Wednesday, JP Morgan boss Jamie Dimon said the investment bank would need ‘significantly’ less office space under plans to introduce more remote working.

‘For every 100 employees, we may need seats for only 60 on average,’ he added.

Property experts say offices are unlikely to be ditched altogether, but that investment will now likely focus on modern buildings that are nice to work in and meet high environmental standards.

And on top of this, flexible workspace provider IWG is betting that regional hubs will soon be preferred to big city ones – with workers simply logging in from a town centre building rather than commuting into London.

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