Skyscrapers Alter London’s Skyline
A series of skyscrapers at different stages of development have been erected in the Square Mile over the past few years. The Shard, the Pinnacle, Heron Tower, the Cheesegrater, the Scalpel, 100 Bishopsgate, and the Wakie-Talkie are all ambitious structures designed to make money and at the same time impress tourists, foreign business representatives and Londoners alike. They are the calling cards and show pieces of their developers and architects. Despite Britain slipping into a double-dip recession, about 2.4 million sq ft of skyscraper space is under construction, large enough to house some 25,000 workers.
According to optimists there will be strong demand for this new high-quality office space from all those tenants looking to rent when their 25-year leases struck after the Big Bang of 1986 expire. Experts believe that tenants occupying some 10 million sq ft of space will soon have to consider relocating to newer buildings.
Back in 2007 construction of the Shard, the 309.6 metres high skyscraper and the tallest building in Europe, was almost cancelled as funding became increasingly difficult with the gathering uncertainty and distrust in the financial system. Thanks to a consortium of four Qatari banks, which invested some £150 million and secured an 80 percent stake in the project, the Shard was finally completed and unveiled in July 2012. One of the most vigorous supporters of the project was former London mayor Ken Livingstone, who criticised English Heritage’s opposition on the tower.
!m[](/uploads/story/540/thumbs/pic1_inline.png)“The Shard will provide jobs, but there will also be spinoffs in terms of bars, cafes and other development. The area was once completely neglected and it is being transformed.” said Mr Livingstone as quoted by The Sunday Times.
A legal dispute has halted for more than a year the construction of what could become the next tallest building in London, surpassing even The Shard. On 5 October the Financial Times reported that the contractor of The Pinnacle, Brookfield Construction, is suing the developers for non-payment of fees and breach of contract. The core of the £1 billion valued building has been erected to just seven storeys before Brookfield vacated the site and filed claims for £14.95 million against The Pinnacle No 1 Ltd and additional £15.58 million against parent companies The Pinnacle Holdings Ltd and The Pinnacle Ltd, who are named as second and third defendants.
“Given that the Pinnacle is worth £1bn, double the value of the recently opened Shard, it is unsurprising to see it go on hold again in January given the current economic environment. And furthermore, it is unlikely that it will come back online in the next 12 months.” opined Noble Francis, economics director at the CPA, as quoted by the FT.
With the global weakness in the economy, developers are trying to finance projects from their own cash reserves instead of borrowing from banks as they did before 2008. “You’ve got to be financing them off your balance sheet. There’s going to be very little new development because the day of the small developer running around raising money from banks is history.” said the British business tycoon Gerald Ronson for the Sunday Times.
At the end of September Electronics giant Siemens unveiled what was supposedly the “most modern of buildings” in London – the £30 million Crystal. According to DeutscheWelle, the building is one of the most energy-efficient and low-carbon in the world. The Crystal produces green energy from solar and ground source heat pumps, recycles rainwater and will be connected to London’s smart grid.
While most observers would agree that these buildings are good for the reputation and image of the City in general it will be interesting to see whether with so many high profile office space coming on line, the market will be able to absorb it whilst maintaining the level of rental contracts necessary to recoup the high capital investment such wonders of architecture require.
