British Land Said to Weigh Shopping Mall at London’s Broadgateby
British Land Co. and GIC Pte, Singapore’s sovereign wealth fund, are considering developing a shopping mall at London’s Broadgate office complex as they seek to become less dependent on financial services tenants, according to two people familiar with their thinking.
The joint venture owners are evaluating opportunities for the redevelopment of 1 & 2 Broadgate, an office building principally leased to broker ICAP Plc until 2019, the people said, asking not to be identified because the deliberations are private. A mall is one of several options and designs are at an early stage, the people said. Spokesmen for British Land and GIC declined to comment.
British Land, the U.K.’s second largest real estate investment trust, and GIC have been transforming Broadgate “from a high quality financial hub into the beginning of a broader-based campus,” Chief Executive Officer Chris Grigg said on a May 16 earnings call. The landlords aim to add as much as 400,000 square-feet of stores at the Broadgate complex, Grigg said. That’s the equivalent of 80 percent of the space in the Gherkin skyscraper.
About 17 percent of British Land’s rental income comes from financial-services companies such as UBS Group AG, whose new London headquarters overlooks the ICAP building, Grigg said. More than 1,900 firms are likely to review their London office-space requirements following the Brexit vote, real estate researcher DealX said in July.
The value of Broadgate fell about 5.5 percent in the six months through September, British Land said in an earnings statement last month. The 4.7 million square-foot campus, the biggest in London’s financial district, is valued at about 4.4 billion pounds, according to Green Street Advisors LLC.