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The <strong>Leadenhall</strong> Building<br />

122 <strong>Leadenhall</strong> Street<br />

1


Authors<br />

Marianne Gatti, Liviu Neagu, Jahi Razzaq<br />

Carried out<br />

in ENVS1030 Introduction to Real Estate at the Bartlett School of Planning, University College London<br />

Date<br />

21. March 2016<br />

Content<br />

The Ledenhall Building<br />

Investment Summary<br />

Building Description<br />

Facts and Figures<br />

Architecture<br />

Sustainability<br />

Location in the City of London<br />

Context<br />

Culture and Relaxation<br />

Connectivity<br />

By Tube and Train<br />

By Crossrail<br />

Surrouding Developments<br />

The Aldgate Area<br />

New Constructions<br />

Occupation<br />

Tenures<br />

Tenancies<br />

Rental Values in the <strong>Leadenhall</strong><br />

Rental Values in the City<br />

4<br />

7<br />

8<br />

8<br />

11<br />

17<br />

19<br />

19<br />

20<br />

22<br />

22<br />

25<br />

26<br />

26<br />

28<br />

30<br />

30<br />

32<br />

35<br />

37<br />

Market Development<br />

2 3<br />

38


The Ledenhall Building<br />

The Ledenhall building – or fondly called the Cheesegrater by<br />

Londoners – is an architecturally impressive and highly workable<br />

office building on a prime site in the City of London.<br />

Why you should be interested? This brochure is going to show you –<br />

and convince you.<br />

References<br />

Image cover: http://www.dailymail.co.uk/news/article-2750808/Latest-addition-Londons-iconic-skyline-<strong>Leadenhall</strong>-Building-opens-doors-offering-stunning-views-city.html (access: 16.2.16)<br />

Image p. 4: http://www.building.co.uk/cheesegrater-tower-nears-completion/5067153.article (access: 10.3.16)<br />

Image p.5: http://www.ifsecglobal.com/fire-engineering-cheesegrater-london-landmark-case-study/ (access: 10.3.16)<br />

4 5


Investment summary<br />

• Iconic building in the heart of the dynamic City of London.<br />

• Floors 15, 27, 32 and 43 are still on offer.<br />

• „Inside-Out“ architecture provides extensive, open and flexible<br />

• spaces.<br />

• The building has BREEAM Excellent rating, which reduces<br />

• cost for cooling and heating.<br />

• The <strong>Leadenhall</strong> has the perfect location to profit substantially<br />

• from the opening of Crossrail in 2017.<br />

• The rents are lower than in the West End and Rent Free Perio-<br />

• des are longer.<br />

• Since market predictions forsee a further increase in rent pri-<br />

• ces, it is now the time to get hold of such a prime asset.<br />

6 7


Building Description<br />

- Facts and Figures -<br />

- Architectural Height: 224m<br />

- Occupied Height: 202.9m<br />

- Hights Ranking:<br />

Europe: 25<br />

UK: 4<br />

London: 4<br />

The City: 2<br />

- Construction: 2011-2014<br />

- Construction costs: approximately £340m.<br />

- Number of floors: 56<br />

Above ground: 52<br />

Under ground: 4<br />

- Lettable floorspace: 610‘000 ft 2<br />

- Floor to ceiling height 2.75m<br />

- Elevators: 26<br />

- Elevator speed: 8 m/s<br />

- Energy lable: BREEAM Excellent<br />

224m<br />

References<br />

http://skyscrapercenter.com/building/the-leadenhall-building/1194 (access: 16.3.16)<br />

Image: http://www.skyscrapercity.com/showthread.php?t=415718 (access: 17.3.16)<br />

Image: http://images.adsttc.com/media/images/5410/9bde/c07a/80b1/d700/0072/large_jpg/Key_Components‘_Expression.jpg?1410374613 (access: 17.3.16)<br />

http://www.insuranceage.co.uk/insurance-age/news/2126025/aon-takes-floors-cheese-grater (access: 17.3.16)<br />

8 9


“For me, The <strong>Leadenhall</strong> Building is about drawing people in. Yes, it‘s impressive;<br />

yes, it‘s an incredible feat of engineering; but it‘s also permeable<br />

and accessible in a way so many other buildings in the City are<br />

not. It engages people - they feel it belongs to them.” [Rogers Stirk<br />

Harbour + Partners]<br />

- Architecture -<br />

The <strong>Leadenhall</strong> Building is a stunning and unique skyscraper in<br />

Central London. Its slanted wedge shape has earned it the nickname,<br />

“cheese grater.“ The lean of the façade is designed so as<br />

not to obstruct the view of St. Paul’s Cathedral from Flee Street.<br />

The tallest building on the Square Mile, the “Cheese Grater” has<br />

the character of an office space with poise. The 46th floor terrace<br />

offers a stunning view of London, and the bottom floor offers a<br />

large and interactive public space. With 610‘000ft 2 of lettable<br />

floor space, this gorgeous building is a ripe opportunity.<br />

The Building is a project by Rogers Stirk Harbour + Partners.<br />

The firm’s focus is mainly on sustainability and social responsibility.<br />

They also tend to focus on spaces that engage the public and<br />

provide for social interaction with their developments.<br />

References<br />

http://www.theleadenhallbuilding.com/architecture/ (access: 17.3.16)<br />

http://www.rsh-p.com/projects/the-leadenhall-building/ (access: 16.3.16)<br />

10 11


The outstanding open floorplan allows a flexible arrangement of<br />

your office space, which is light flooded from three sides of glass<br />

facades. This advantage was made possible through the north facing<br />

circulation and service tower, which includes the lifts and<br />

bathrooms. This so called „Inside-Out“ design is typical for Rogers<br />

and can be described as „exposing the structural skeleton,<br />

servicing entrails and vertical circulation outside the main body<br />

of the building“ (Buchanan 2013). This can also be observed at<br />

the Lloyd‘s Building accross the street from the <strong>Leadenhall</strong>.<br />

Floor 6 Floor 22 Floor 40<br />

References<br />

Buchanan, Peter (2013): Inside Inside Out: Under the skin of Richard Rogers‘ show at the RA. http://www.architectural-review.com/rethink/reviews/inside-inside-out-under-the-skin-of-richard-rogers-show-at-the-ra/8652165.<br />

fullarticle (access: 17.3.16)<br />

http://www.theleadenhallbuilding.com/architecture/spaces/ (access: 17.3.16)<br />

http://www.rsh-p.com/projects/the-leadenhall-building/ (access: 17.3.16)<br />

Images: http://www.archdaily.com/547041/the-leadenhall-building-rogers-stirk-harbour-partners/54109c4ac07a80dfae000068-the-leadenhall-building-rogers-stirk-harbour-partners-level-40-floor-plan(access: 17.3.16)<br />

12 13


14 15


- Sustainability -<br />

The distinctive shape of the building is for sustainability just as<br />

much as for aesthetics. The south side, the side of the incline, is<br />

equipped with three layers of glass specifically designed to minimize<br />

the need for cooling systems to regulate office temperature.<br />

The north side contains elevators and other services, and in the<br />

top of the building- where there is too little space for offices- resides<br />

other infrastructure necessary to the inner workings of the<br />

building. This, and other aspects of the design, earned the building<br />

an ‘Excellent’ BRREEAM rating.<br />

References<br />

http://www.theleadenhallbuilding.com/architecture/ (access: 17.3.16)<br />

Images p. 14-15 & 16: http://www.theleadenhallbuilding.com/gallery/ (access: 17.3.16)<br />

16 17


1<br />

London Wall<br />

Liverpool Street<br />

Bishopsgate<br />

Location in the City of London<br />

- Context -<br />

2<br />

3<br />

Bank<br />

Cornhill Street<br />

<strong>Leadenhall</strong><br />

Market<br />

Bishopsgate<br />

4<br />

L<br />

3<br />

Lloyd‘s<br />

2<br />

St. Mary Axe<br />

Bevis Marks<br />

1<br />

<strong>Leadenhall</strong> Street<br />

Willis Towers<br />

The Gherkin<br />

Aldgate<br />

Aldgate High Street<br />

The City of London is one of the 33 Boroughs of London with<br />

an area of only one square mile. Here Londinum was founded<br />

by the Romans in 50AD and has since then evolved into one of<br />

the leading centres of global finances (cityoflondon.gov.uk). In<br />

2014, the City’s economy generated £45 billion, which equated<br />

to 14% of London’s economic output and a staggering 3% of the<br />

UK (Cambridge Econometrics 2014). This massive turnover is<br />

produced by 320’000 workers. Only 10’000 people actually live<br />

on the Square Mile in specific residential areas (City of London<br />

Carbon Footprint 2009).<br />

In the report “Decoding Global Talents” London topped the<br />

list for employee attraction, which again shows how competitive<br />

London is in terms of salaries, living standards and in attracting<br />

highly qualified workers (Roberts 2014).<br />

In June Britain will have a referendum on whether to stay in the<br />

EU (Wheeler & Hunt 2016). Even tough voices from both sides<br />

of the argument foresee Britain’s doomsday, the more realistic<br />

views are – either way – by far not that daunting. In case Britain<br />

stays in the EU, business continues as usual. In case Britain decides<br />

to leave the EU, the nation will very likely retain its pre-eminent<br />

position in the world’s economy. Outside EU regulations,<br />

Howard Shore explains, Britain “would be able to liberalise […]<br />

(their) economy, set […] (their) framework and rules to suit […]<br />

(the nation)” (Jenkins & Agnew 2016).<br />

References<br />

Cambridge Econometrics (2014): The Future of the City of London’s Economy. http:// www.camecon.com/FutureoftheCityofLondonsEconomy.aspx (access: 29.10.2015)<br />

The City of London (2009): City of London Carbon Footprint. https://www.cityoflondon. gov.uk/services/environment-and-planning/sustainability/Documents/pdfs/sus_carbon¬footprintreport.pdf (access: 18.11.15)<br />

The City of London: City Timeline. https://www.cityoflondon.gov.uk/things-to-do/visit-the-city/our-history/Pages/timeline.aspx (access: 3.3.16)<br />

Roberts, Hywel (2014): London top city for employment attraction. http://www.hrmagazine.co.uk/article-details/london-top-city-for-employee-attraction (access. 3.3.16)<br />

Wheeler, Brian; Hunt, Alex (2016): The UK’s EU referendum: All you need to know. http://www.bbc.co.uk/news/uk-politics-32810887 (access: 3.3.16)<br />

Jenkins, Patrick; Agnew, Harriet (2016): What would Brexit mean for the City of London? http://www.ft.com/cms/s/2/e90885d8-d3db-11e5-829b-8564e7528e54.html#axzz41rWxBVqs (access: 3.3.16)<br />

Photos and Map: Marianne Gatti<br />

18 19<br />

4<br />

Gracechurch St.<br />

Monument<br />

Walkie<br />

Talkie<br />

Fenchurch Street<br />

Fenchurch<br />

Street<br />

1:5000<br />

0 50 100 150 200 250m<br />

N


- Culture And Relaxation -<br />

The City of London is not only a place for business, but there<br />

are also many opportunities for culture and relaxation. The project<br />

“Sculpture in the City” is a free art exhibition in the public<br />

spaces of the City of London and is running for the fifth year in<br />

2016. Artists present their works in annually changing exhibitions,<br />

many of which stand in close proximity to the <strong>Leadenhall</strong><br />

building. This year, the “Cheese Grater” is actively participating<br />

in this program by providing the space for the educational programming,<br />

which should engage school children with the art installations.<br />

There are many places across the busy City of London, which<br />

invite people to spend a moment of tranquillity. Just outside the<br />

<strong>Leadenhall</strong>, there is a big open square with greenery and benches.<br />

However, there are also a variety of more quiet green spaces, hidden<br />

in small churchyards and alleys, which want to be explored<br />

and used for a lunch break in summer time.<br />

Two important cultural venues are the <strong>Leadenhall</strong> market and the<br />

Guildhall Art Gallery. The first one is a retail centre in a Victorian<br />

market hall, where events take place occasionally. The Guildhall<br />

Art Gallery is only a ten-minutes walking distance away from the<br />

<strong>Leadenhall</strong> and presents since 1886 art pieces mostly related to<br />

London.<br />

References<br />

https://www.cityoflondon.gov.uk/things-to-do/visit-the-city/art-architecture/sculpture-in-the-city/Pages/introduction-to-sculpture-in-the-city.aspx (access: 17.3.16)<br />

Image: http://hifructose.com/2015/07/06/londons-sculpture-in-the-city-presents-public-art-by-damien-hirst-ai-weiwei-and-more/ (access: 17.3.16)<br />

http://www.cityoflondon.gov.uk/things-to-do/visit-the-city/attractions/guildhall-galleries/Pages/guildhall-art-gallery.aspx (access: 17.3.16)<br />

20 21


Connectivity<br />

- By Tube and train -<br />

Moorgate<br />

Liverpool Street<br />

Rail services from<br />

Fenchurch Street: Tilbury and Southend Railway<br />

Liverpool Street: Great Eastern Main Line; West Anglia Main<br />

Line (google maps).<br />

Bank<br />

L<br />

8mins<br />

Aldgate<br />

L<br />

Canon<br />

Street<br />

Monument<br />

Fenchurch<br />

Street<br />

Tower<br />

Gateway<br />

Tower Hill<br />

References<br />

Google Maps: https://www.google.ch/maps/place/122+<strong>Leadenhall</strong>+Street,+London+EC3V,+Vereinigtes+Königreich/@51.513831,-0.0848679,16.36z/data=!4m2!3m1!1s0x4876034d5f990f3d:0x9e61a92d03c0a8dd (access:<br />

3.3.16)<br />

Tube Map: https://alex4d.files.wordpress.com/2009/09/tube-map-merchandising-vers.gif (access: 3.3.16)<br />

Map: Marianne Gatti<br />

1:7500<br />

0 100 200 300 400 500m N<br />

22 23


- By Crossrail -<br />

Liverpool<br />

Street<br />

L<br />

The benefit Crossrail is going to contribute to the City of London<br />

will be immense, since the number of people who are able to<br />

access work in the City will soar. Furthermore, the travelling time<br />

from Heathrow airport to Liverpool Street will shorten from a<br />

current 55mins to only 34mins. This strengthens the <strong>Leadenhall</strong><br />

buildings location as an international meeting point. Of high<br />

interest to a possible investor in the <strong>Leadenhall</strong> building is the<br />

fact, that Crossrail will create a £5.5 billion added value to the<br />

real estate along its lane (crossrail.co.uk A). The <strong>Leadenhall</strong> has<br />

the perfect location to gain increased value through the project.<br />

The closest station to the <strong>Leadenhall</strong> building will be Liverpool<br />

Street. Already in May 2017 the first trains will run from this<br />

station towards the East of London. The full line will be operable<br />

by December 2019 (crossrail.co.uk B).<br />

References<br />

Crossrail A: http://www.crossrail.co.uk/news/crossrail-in-numbers (access: 3.3.16)<br />

Crossrail B: http://www.crossrail.co.uk/route/improved-journeys (access: 3.3.16)<br />

24 25


Surrounding Developments<br />

- Aldgate Area -<br />

No area in London is spiked with more cranes than the City:<br />

Construction is everywhere. The Aldgate area used to be a deprived<br />

area with fewest people living there in the whole of London.<br />

This is changing with the Aldgate project. A new public square<br />

is under construction as well as new offices and residential units.<br />

These residences are of high interests to workers in the City, as<br />

they can easily walk to their workplace in just a few minutes<br />

(City A.M.).<br />

References<br />

https://www.cityoflondon.gov.uk/services/transport-and-streets/transport-planning/transport-projects/aldgate-area/Pages/about.aspx (access: 15.3.16)<br />

26 27


- New Constructions -<br />

22 Bishopsgate<br />

Mitre Square<br />

Aldgate<br />

Bank<br />

L<br />

The Scalpel<br />

Aldgate<br />

Development Area<br />

22 Bishopsgate<br />

- Offices<br />

- Cultural Programs on Ground<br />

- Floor<br />

- Retail on Lower Floors<br />

- Resaurant, Bar and free Viewing<br />

- Platform at the top<br />

The Scalpel - 52 Lime Street<br />

- Office Building<br />

Mitre Square 1<br />

- Office Building<br />

N<br />

Fenchurch<br />

Street<br />

1:5000<br />

0 50 100 150 200 250m<br />

N<br />

References<br />

22 Bishopsgate Image: http://www.dezeen.com/2015/07/01/replacement-london-pinnacle-skyscraper-officially-revealed-22-bishopsgate-plp-architecture-england-stuart-lipton/ (access: 16.3.16)<br />

The Scalpel Image: Photo by Marianne Gatti<br />

Mitre Square Image: http://www.mitresquareec3.com/building.php (access: 16.3.16)<br />

28 29


Occupation<br />

- Tenures -<br />

British Land and Oxford formed a joint venture in 2010 and<br />

together developed the <strong>Leadenhall</strong> Building. British Land owned<br />

the P&O Tower (Peninsular and Oriental), which was occupying<br />

the site before the <strong>Leadenhall</strong>. The project was initially delayed<br />

by the financial crisis but was revived in 2010 when Oxford Properties<br />

joined the development efforts.<br />

Paul Brundage, Executive Vice President, Senior Managing Di-<br />

rector Europe of Oxford Properties said: “We are delighted to be<br />

partnering with British Land on the <strong>Leadenhall</strong> project. In terms<br />

of both strategy and approach British Land is strongly aligned<br />

with Oxford Properties’ own objectives, making us well placed<br />

as partners […]. In investment terms, this project […] is further<br />

evidence of our long-term commitment to, and confidence in,<br />

the London market.“<br />

British Land is one of Europe‘s largest Real Estate Investment<br />

Trust (REITs). Its portfolio includes commercial, retail and residential<br />

assets and is worth £19.7bn.<br />

Oxford Properties, established in 1960, is a global real estate owner,<br />

investor, developer and property manager with a portfolio<br />

of office, retail, multi-residential and hotel assets. Their Europe<br />

Portfolio is worth £4bn.<br />

References<br />

http://www.theleadenhallbuilding.com/architecture/the-team-behind-the-leadenhall-building/ (access: 16.3.16)<br />

http://www.britishland.com/news-and-views/news/archive/2010/22-12-2010.aspx (access: 16.3.16)<br />

http://www.britishland.com/about-us/our-portfolio.aspx (access: 16.3.16)<br />

http://www.oxfordproperties.com/corp/Web/Default.aspx (access: 16.3.16)<br />

30 31


- Tenancies -<br />

According to a press release from 29th of January 2016, the<br />

<strong>Leadenhall</strong> Building is now 94% let or under offer, with ten<br />

companies currently in occupation across 32 floors. Among the<br />

occupiers are global insurance broker AON, leading insurance<br />

companies Amlin and FM Global and other high-profile organisations.<br />

Floor(s): 35 34<br />

Area [sq. ft.]: 9‘970 10‘345<br />

Lease: 10 years 10 years<br />

Info: The oil and gas company Petredec will move its European<br />

headquarters here.<br />

4-13 19-24<br />

203‘333 111‘000<br />

19<br />

Insurer Aon occupies 1/3 of the total office<br />

space.<br />

Insurer Amlin occupies 1/5 of the<br />

total office space.<br />

References<br />

City A.M.: http://www.cityam.com/224329/british-lands-leadenhall-building-cheesegrater-has-two-new-tenants-petredec-and-fidelis (access: 16.3.16)<br />

http://www.cityam.com/220396/whats-cheesegrater-aon-amlin-heres-storey-storey-breakdown-every-business-leadenhall-building (access: 14.3.16)<br />

http://www.cityam.com/220396/whats-cheesegrater-aon-amlin-heres-storey-storey-breakdown-every-business-leadenhall-building http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/9749648/Insurer-Amlin-rents-space-in-the-Cheesegrater.html<br />

(access: 16.3.16)<br />

http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/9749648/Insurer-Amlin-rents-space-in-the-Cheesegrater.html (access: 16.3.16)<br />

http://www.freeofficesearch.com/OfficeSpaceNews/Aon-Signs-Office-Space-Pre-Let-At-The-<strong>Leadenhall</strong>-Building (access: 16.3.16)<br />

32 33


Most of the occupiers have decided not to disclose details of their<br />

contracts. However, the rental value in the <strong>Leadenhall</strong> building<br />

is believed to be over £70 per ft 2 , being one of the highest in the<br />

City.<br />

Servcorp, is currently occupying Level 30, which provides 30ft 2<br />

on a rent of £72.50 per ft 2 . The lease term is 15 years, with a bre-<br />

- Rental Values in the <strong>Leadenhall</strong>ak<br />

option at 10 years. There is also an initial rent free period of 24<br />

months and there will be a second rent free period of six months,<br />

should the option to break not be exercised.<br />

The <strong>Leadenhall</strong> building also established a record-high for City<br />

office rent. The insurance company FM global agreed to pay £85<br />

per ft 2 per annum for Floor 41, comprising circa 7,700ft 2 .<br />

References<br />

https://www.cityoflondon.gov.uk/services/transport-and-streets/transport-planning/transport-projects/aldgate-area/Pages/about.aspx (access: 15.3.16)<br />

34 35


- Rental Values in The City-<br />

Prime City office rents are typically £57.50 - £67.50 per ft 2 per<br />

annum and £72.50 - £82.50 per ft 2 for the upper floors of tower<br />

buildings.<br />

“City core rent, rates and service charge occupancy costs are typically<br />

£85.00 - £102.50 per ft 2 compared with £155.50 - £187.50<br />

per ft 2 for prime West End space.”<br />

In ‘landmark’ towers, such as the <strong>Leadenhall</strong> building, rents tend<br />

to be higher. For the upper floors of such buildings, rents are now<br />

typically above £77.50 per ft 2 per annum.<br />

Usual rent free periods for 5-year leases go up to 11 months in<br />

the City core area. In comparison, for a 5-year lease in the West<br />

End prime, the rent-free period typically goes up to 8 months.<br />

References<br />

Carter Jonas: http://www.carterjonas.co.uk/our-services/~/media/BF71AF1B0F854D09BD82542AA35E06EF.ashx (access: 16.3.16)<br />

36 37


Market Development<br />

The demand for Central London office space has continued to<br />

increase during 2014. The increasing demand also impacted on<br />

the rental values of the area. Consequently, the office market<br />

landlords have increased the rents by circa £2.50 and £7.50 per<br />

ft 2 per annum since 2014. For the next two years, the rents are<br />

expected to continue rising.<br />

Comparison and Expectation:<br />

Q1 2015 Q1 2016 Q1 2017<br />

City Prime £62.50 £65.00 £67.50<br />

The increasing rental prices encouraged the signing of pre-letting<br />

agreements, which enabled the tenant to benefit from a lower<br />

commencing rents once construction has been completed.<br />

The <strong>Leadenhall</strong> Building was 50% pre-let prior to completion.<br />

The proliferation of pre-letting agreements, however, is limiting<br />

choice and accelerates the already existing trend for rent increase.<br />

However, according to a market research of Carter Jonas, the current<br />

wave of office developments is likely to restore by 2017/2018<br />

the stability between supply and demand.<br />

References<br />

Carter Jonas: http://www.carterjonas.co.uk/our-services/~/media/BF71AF1B0F854D09BD82542AA35E06EF.ashx (access: 16.3.16)<br />

Image: http://www.theleadenhallbuilding.com/wp-content/uploads/2014/08/The_<strong>Leadenhall</strong>_Building_Aerial_101-1024x684.jpg (access: 16.3.16)<br />

38 39


Investment summary<br />

• Iconic building in the heart of the dynamic City of London.<br />

• Floors 15, 27, 32 and 43 are still on offer.<br />

• „Inside-Out“ architecture provides extensive, open and flexible<br />

• spaces.<br />

• The building has BREEAM Excellent rating, which reduces<br />

• cost for cooling and heating.<br />

• The <strong>Leadenhall</strong> has the perfect location to profit substantially<br />

• from the opening of Crossrail in 2017.<br />

• The rents are lower than in the West End and Rent Free Perio-<br />

• des are longer.<br />

• Since market predictions forsee a further increase in rent pri-<br />

• ces, it is now the time to get hold of such a prime asset.<br />

40 41

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