Progress made on UBS’s new City offices

UBS pre-let and lease extensions agreed at Broadgate office scheme

Article posted: 31 Jan 2012

British Land and Blackstone have announced they have satisfied the remaining outstanding conditions on the agreement with UBS AG to pre-let 5 Broadgate and can proceed with the development of the new building which will deliver 700,000 sq ft of office space in the City of London.

Demolition of the existing 4 & 6 Broadgate buildings is well underway and will be completed in April, with delivery of the new bespoke building on schedule for Q4 2014.  The joint venture has already placed or tendered around 60% of the project’s construction costs within budget and programme.

UBS will lease the entire building for an average of 18.2 years to first break at an initial rent of £54.50 per sq ft subject to annual increases in line with RPI (within a range of 0-4% per annum).  UBS will be given a rent free period of 18 months.

As part of the agreement, UBS has also deferred exercising lease break options on 755,000 sq ft of existing office space at Broadgate which they currently occupy (comprising 1-2 Finsbury Avenue, 8-10 Broadgate and 100 Liverpool Street) until 18-36 months following practical completion, to allow the new building to be fitted out. The earliest date that UBS can break the leases is towards the end of Q2 2016. Deferring the lease breaks will ensure that the joint venture receives a further £74 million of rent, approximately £32 million of this was agreed by UBS on signing of the conditional agreement in 2010, as part of a package of negotiated lease amendments.

Tim Roberts, Head of Offices for British Land, said: “This is another significant milestone in the development of the new UBS building at 5 Broadgate and a real boost for the City. The Broadgate estate continues to evolve to serve the needs of a range of city occupiers and the 30,000 people based there.”

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Posted by Sara