UBS AG, Switzerland’s biggest bank, agreed to lease a new purpose-built building in London’s main financial district for about 18 years, confirming an accord announced in August 2010.
Demolition of an existing building is under way at Broadgate, adjacent to Liverpool Street railroad station, to prepare the site for the new 700,000 square-foot (65,000 square meters) office, developers and future landlords British Land Co. and Blackstone Group LP said in a statement today. UBS will use 5 Broadgate as its U.K. base.
Construction is scheduled to finish in the final quarter of 2014. UBS agreed to defer termination of its existing leases on three buildings in or close to Broadgate, which are also owned by the partners, by as much as three years to allow the fit-out of the new building. This will generate 74 million pounds ($116 million) in additional rent, the development partners said in the statement.
UBS will pay rent of 54.50 pounds a square foot, which will be pegged to inflation. The bank has obtained an 18-month waiver on rent.