Cheesegrater Secures 51% Pre-Lets after Tenancy Deal with Insurer

on Dec 18, 2012
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**Amlin Takes Space at Leadenhall Building**

British Land’s (LON:BLND) under-construction Leadenhall Building, a skyscraper in the City of London financial district, is now over 50 per cent pre-let, The Times reported on 17 December 2012. The FTSE 100 real estate investment trust and its Canadian partner, Oxford Properties, announced yesterday that Lloyd’s of London insurer Amlin (LON:AML), has agreed to a 111,000 square feet pre-let of office space with an option to take up a further 36,500 square feet at the Cheesgrater, as the tower is dubbed due to its tapering design by famous high-profile architect Richard Rogers. Amlin will rent eight floors of the Central London skyscraper, which is on track for completion in mid-2014. The insurer is expected to move into the new building in March 2015 when it will be vacating its space in the nearby Aviva Tower.

Amlin’s group finance and operations director, Richard Hextall, said: “We have decided that the Leadenhall Building will provide the best solution for our expanding group and London operations. Leadenhall will provide our staff with perfectly located offices in this elegant, high rise building and we look forward to moving to our new headquarters in 2015.”

**Cheesegrater Pushes Over 50% Pre-Let Mark**
Tim Roberts, head of offices at British Land, also commented on the deal with Amlin. He was quoted as saying: “This will be our second major pre-letting at the building and it shows the considerable appeal of our offer — highly specified and well located buildings of strong architectural quality coupled with a commitment to occupier service.”

!m[Insurance Company Amlin to Rent Eight Floors of Leadenhall Building in London’s Financial District](/uploads/story/1053/thumbs/pic1_40_inline.png)
This latest pre-letting at the Cheesegrater means that the 224-metre tower is now 51 per cent filled ahead of completion, after insurance broker Aon (NYSE:AON) signed up for a major chunk of the building last year. Aon paid £56.60 per square foot for the space which is more than the City average of between £50 and £55 per square foot. Amlin, however, is likely to have paid even more, as it will occupy the top 45th floor of the Cheesegrater, analysts say. Yet the insurer declined to comment, while British Land and Oxford Properties also kept the terms of the tenancy deal undisclosed.

**Ahead of Competition Yet Lagging in Stock Performance**
According to a Reuters’ report on the news, property developers elsewhere in London are faring worse than British Land and its Canadian partner. A skyscraper at 100 Bishopsgate is still hunting for its first letting to trigger construction and the nearby Pinnacle skyscraper has stalled as a stump in the ground after failing to sign a major tenant against the backdrop of a legal row between the developer and the builder. On the south side of the Thames, the Shard, the European Union’s tallest skyscraper, has failed to sign an office tenant since opening to great fanfare in July.
Despite the relative success of the joint venture building the Cheesegrater and the positive news that the majority of the space in the building is now pre-let, British Land’s share price declined by 2 pence to 558.50 pence during yesterday’s London trading.

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