City of London Offices Sell for Nearly Double Guide Price
The 56,000 sq ft office building at 5-10 Great Tower Street has been bought by real estate group Dominus for a reputed sum close to £25 million, against Cushman Wakefield’s guide price of £15 million. The sale comes as the City of London has indicated it may relax the Square Mile’s strict planning requirements, that protect existing offices, to encourage alternative uses for secondary buildings.
Dominus launched in 2011 and quickly built a hotels portfolio across the UK. It has more recently expanded into residential, student homes and mixed-use development. It is understood that plans for this building is for redevelopment as a hotel.
Has this price achieved been influenced to any extent by the City of London’s recently indicated plans and the content of its “The Future of the Office” 2023 Arup Report?
Probably the most significant recommendation in the Arup report is the introduction of a “fast track” planning approach to ensure more “diverse and inclusive spaces” are built and to enable the introduction of more alternative uses by reducing the requirements needed to support the loss of office floorspace. At the moment, the Local Plan and the draft City Plan policy protects “suitably located and viable office floorspace” by requiring two types of evidence to support a loss of office floorspace. Marketing evidence is used to assess whether there is interest from occupiers in the space, while viability evidence assesses whether continued office use would provide a viable return for the landlord.
Whilst the report says: “a ‘fast track’ planning approach could help deliver more diversity and inclusivity and alternative uses these uses should be complementary to the City’s primary business role. They could include hotel and visitor accommodation or cultural space, educational space, particularly for business-related uses, new publicly accessible open space and space within buildings, including rooftop space and viewing galleries.”
The City adds that the approach would not remove the policy which protects suitably located office space.