Business approach: the city’s tallest tower rises from the ashes of the shame of property | London Evening Standard



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The tallest tower in the city is not yet finished, but it no longer takes into account its illustrious nearby neighbors such as the nearby “Cucumber” and Tower 42.

Shooting at the heart of London’s insurance industry, 22 Bishopsgate, is a voracious beast from a building with 1,500 tonnes of steel a week piled up on the skyscraper, which could house 12,000 workers in the capital. There is enough wiring and cables to stretch around the world twice.

However, financially it is also a huge company. The 278-meter tower rises from the ashes of one of the world’s most recent shames of city property. Previous developers of the site – Arab Investments by Khalid Affara, Saudi fund Sedco and Kuwaiti fund Wafra – bought it at the top of the market in 2007 with bold plans for a helter-skelter-style tower known as Pinnacle. . But when the money ran out in 2012, the Square Mile was left with a seven-story concrete core called “the stump”. “It was an overwhelming embarrassment,” says a veteran of the city property. “We haven’t had a ‘Spanish hotel’ on the Square Mile for decades.”

Enter veteran developer Sir Stuart Lipton. His association Lipton Rogers developed a new 1.3 million square meter scheme for the site and three years ago it was bought by a consortium led by Axa Real Estate, which includes Singapore sovereign wealth fund Temasek, and two investors. Canadians.

But while most developers need to secure a pre-lease to a tenant for things to move, 22 Bishopsgate (or TwentyTwo in the slightly modern marketing framework) is purely speculative.

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With only construction costs of around £ 600 million, in addition to the £ 300 million paid by the site, this is a £ 1bn bet on the city’s real estate market – the largest since Land Securities and British Land fired the “Walkie Talkie” and the “Cheesegrater” two years after the financial crash.

TwentyTwo wants to be something a little different: the developers style it as a “vertical village,” with restaurants, art galleries, and public space, even a climbing wall on the 42nd floor for those who don’t suffer from vertigo.

Its sponsors want it to be the most advanced building: there is optional facial recognition technology for people entering and potential workers will even be able to control the blinds built into windows with their iPhones. It is also intended to be easy to use: tenants can also sign up for leases to bring their dogs.

Still, with Brexit coming down the track it seems like a brave call. But Sir Stuart and Harry Badham, head of AXA’s development arm in the UK, never really thought about leaving the scheme after the referendum result; with some blood, Badham was left with his plans for a fishing trip the day after the vote, “even though I passed it on the phone.”

He is now looking for tenants and, although there are names in the frame: insurer Aspen has been linked to the building since last summer, while rivals Beazley and Hiscox are also in talks; property sources murmur, they still don’t have an agreement on the line.

Sir Stuart, sitting in TwentyTwo’s somewhat embryonic marketing suite (a large screen, some ceiling lamps and little else), comes across this: “There’s no shortage of tenants, but this is a great kit. “There are a lot of toys in the building, such as facial recognition. All these things take time and all the tenants and their agents want to pass these things under a microscope. Take our word, there are actions here.”

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Part of the reason for this is that they think they have timed the market. Time is everything in real estate promotion; make a mistake and end up with an expensive stump. But TwentyTwo will have to be finished by the end of 2019, just in time to coincide with a spacewalk in the city in 2020 and 2021.

With the recent cultivation of virtually full towers and other schemes such as the Singapore-backed “Lattice” is unlikely to see the light of day for a decade (if at all possible), larger tenants may not have as many options. .

Ben Raywood, a city expert at real estate agent Savills, says: “In 2017, 7.4 million square meters were processed in the city, 26% more than the long-term average. We thought that the year The past was going to be quiet and it turned out to be anything but.If you look at the development pipeline beyond 2019, there aren’t many opportunities if you’re an occupant looking for 200,000 square feet of space. hands, they could be in a very awkward situation ”.

Sir Stuart and Badham expect these dynamics to get their hands on them, but future tenants continue to demand room for maneuver to mix their space requirements based on the outcome of an uncertain Brexit process. “In all the discussions we’re having right now there’s a flexibility clause,” Badham says. A tenant after three floors could end up taking two or four.

Despite TwentyTwo’s marketing language, rival building developers are privately spreading the architecture, labeling it “tasteless” and citing rumors that the City of London Corporation later regretted granting the urbanization permit.

But Sir Stuart says the strategy was to make TwentyTwo “a quiet building” compared to its neighbors’ designs and stresses that “in a city market, occupants want large, efficient floorboards”. The more complex architecture of schemes such as the next scalpel (which has struggled to find tenants) can also pose a commercial challenge.

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TwentyTwo’s conventional design also explains the only thing it doesn’t have so far: a nickname. Sir Stuart is determined to continue like this. “The reason he doesn’t have one is that the tenants don’t want to be jokers. If I went to Canary Wharf, there are no nicknames. That [building] he’s a great guy, so what we didn’t want was for him to be vulgar and ostentatious. “

Even if you don’t have an architectural style, burying the legacy of “the stump” will be enough reward for TwentyTwo sponsors.

Dog license

Candidates for tenants who can’t stand the separation of their four-legged friends will be relieved to know that TwentyTwo sponsors will welcome dogs to London’s newest skyscraper, citing the resulting increase in morale, behavior and the office community. But occupants will not be allowed to leave their pets in the office overnight.

Owners will need to keep them under control at all times and make sure they don’t disturb anyone else in the building.