'Cheesegrater' project to go ahead

This announcement is great news for those interested in property in the City of London. Reports from surveying firms have highlighted that, due to the cessation of development in the City environs during the recession, a shortage of prime property is likely to arise from 2012. The revival of the project is therefore not a huge surprise, but brings a welcome smile at the end of what has been a year lacking in good news for many property players.

It is interesting to note that British Land's joint venture partner is from a Canadian pension fund. Similar partnerships are expected with overseas investors for property projects of all sizes next year, as there is no indication that there will be a significant change in the attitude of banks to the funding of property developments in 2011.

Known as the 'Cheesegrater' because of its unusual wedge-shaped design, the 47 storey, 736 ft (224m) tower is expected to cost around £340m to build. British Land has provided the land valued at £90m for the 610,000 sq ft development. The initial £90m required to get the project moving will be contributed by Oxford Properties, the real estate arm of Ontario Municipal Employees Retirement System (Omers) pension fund. The total contribution from the UK company is expected to be around £125m, as further development costs are to be split equally between the two firms.

The project was shelved during the recession but following interest from a number of corporations, British Land has now decided to go ahead, with work expected to begin early next year. The shell and core of the building are expected to be finished by mid-2014.

British Land chief executive Chris Grigg said: "We believe that the Leadenhall Building will provide the City of London with a unique combination of iconic architecture with world-class public and office spaces."

For further information, contact:

Heather Powell, a partner at Kingston Smith LLP
Tel: 020 7566 3811
Email: hpowell@kingstonsmith.co.uk