British Land in Talks on Biggest London Office Lease Since Covid

(Bloomberg) -- British Land Co. and GIC Pte are in talks to rent out a major chunk of their City of London Broadgate campus in what would be the biggest office lease signed in the U.K. capital since the onset of the pandemic.

Law firm Allen & Overy is negotiating to rent about 300,000 square feet (27,870 square meters) of office space at the planned One Broadgate redevelopment, people with knowledge of the talks said. The deal is at an early stage and there’s no certainty that a lease will be signed, they added, asking not to be identified because the talks are private.

“With over 40 offices around the world, we have leases in effect with various expiration dates and always plan ahead appropriately,” a spokesman for Allen & Overy said by email. “As part of our usual forward planning, we are collating information on possible options for when the lease comes to an end, including staying in our current building or moving to different premises.”

Allen & Overy’s existing lease at Bishops Square doesn’t expire until 2030, but the law firm has the option to break the lease in 2027, the people said.

A spokeswoman for British Land declined to comment.

The planned One Broadgate redevelopment will replace the former headquarters of inter-dealer broker TP ICAP Group Plc with about 490,000 square feet of offices, as well as restaurants, stores and bars.

Large companies in London that want new state-of-the-art space are being forced to pin down new premises several years in advance due to the relative dearth of planned office projects. That’s creating a two-tier market, where rents for the best new buildings remain high even as older buildings suffer from a surplus of space being offered for sublet by firms that are shrinking.

The pandemic has unleashed an intense debate about the future of the office after the forced experiment of mass home working mostly proved a success. While executives initially focused on the opportunity for cost savings, a growing number are now pining for a return to more centralized setups as the novelty of full-time home working wears thin.

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