TH Real Estate seeks Leadenhall Triangle investor

TH Real Estate has moved to derisk its 1m sq ft redevelopment of Leadenhall Triangle, EC3, by launching the search for an investment partner.

Cushman & Wakefield has been instructed to find a partner for the 2.5-acre site, which is valued at around £365m. The Western site has planning permission for 890,000 sq ft of offices and 20,000 sq ft of shops. The Make-designed scheme, known as “Gotham City”, ranges in height from seven to 34 storeys and has an estimated build out cost of $1.5bn (£1.2bn).

Following exercise of the option of the land swap agreement with the City Corporation the 1.5-acre Western site will be held freehold. The Eastern site comprises the Hallmark Building, 100 Fenchurch Street and 107 Fenchurch Street – comprising around 215,000 sq ft of office, retail and ancillary space.

Following an exercise of the option of the land swap agreement with The City Corporation, the Eastern site will be held on a long lease for a term of 200 years at a gearing of 14.5% receivable rents.

The total Eastern site is around 40% let and is being marketed as an asset management opportunity. Hallmark and 100 Fenchurch Street have recently been refurbished, while 107 Fenchurch Street is fully let.

The site was acquired in 2011 through Henderson Global Investor’s Central London Office Fund and Central London Office Fund II in partnership with Canada’s largest institutional investment fund Alberta Investment Management Corporation.

It was bought from administrators appointed in 2010 following the borrower’s default and a review undertaken by Cooke & Powell, which was engaged as strategic property adviser by Hatfield Philips International as special servicer of the loan. AIMCO will retain its position in the joint venture.

Plans for the Western site were approved by the City of London Corporation in 2014. TH Real Estate said in July the office project would only continue “subject to the pre-letting of sufficient space to support our business plan”. However, the search for a new joint venture partner appears to be an alternative bid to bring the scheme forward.

The property investment manager is already speculatively delivering 300,000 sq ft of offices at 60-70 St Mary Axe, EC3.

The building, known as the “Can of Ham” is due for completion in 2018. Central London take-up is expected to fall by around 5% in 2017 to 11.2m sq ft, according to Knight Frank.

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