British Airways Pension Trustees Ltd. plans to finance the development of shops and offices on London’s Oxford Street, the U.K.’s busiest shopping district.
The 6,100 square-meter (66,000 square-foot) development at 61-67 Oxford Street and 11-14 Soho Street will also include six apartments, according to a filing to Westminster Council. The plan was submitted to the local government body by London-based developer Dukelease Properties Ltd.
Pension funds and insurance companies are increasing lending for real estate, which provides greater returns than bonds. The average margin on loans secured by prime office property in the U.K. increased to about 3 percent from 2.3 percent last year, according to a December survey by De Montfort University.
The airline’s pension trustees bought the Oxford Street site for 18 million pounds in November 2009, according to a Land Registry filing. The development would include a single 3,700 square-meter retail space, about 1,560 square meters offices and 873 square meters of residential space, according to the filing. Dukelease projects director Paul Cook did not return calls seeking comment yesterday and the pension trustees declined to comment.
The building is at the eastern end of Oxford Street, where a Crossrail train station will open in 2018. Developers including Derwent London Plc and Great Portland Estates Plc are investing in land in the area, betting that the station will make it more attractive to customers.
“The introduction of a large single-tenant retail space here will contribute greatly to the regeneration of this end of Oxford Street,” according to documents submitted by broker CBRE Group Inc. on behalf of Dukelease.
Primark Stores Ltd. has already agreed to open a store at that end of street and “there is a clear need for further flagship stores” there, such as the one planned by Dukelease, CBRE said.
To contact the reporter on this story: Neil Callanan in London at firstname.lastname@example.org.