AXA IM Alts has exchanged contracts to acquire a prime site in the City of London for the development of a net zero office tower, in what is being seen as a post-pandemic vote of confidence in the UK capital's office market.
The French alternatives investment giant is purchasing a 250-year lease for 50 Fenchurch Street from The Clothworkers’ Company, a 500 year-old livery company, on behalf of clients through its real assets platform.
Although financial details were not disclosed, AXA IM Alts is understood to be investing over £1 bn (€1.2 bn) in the project, which will see a 36-storey office tower comprising 650,000 sq ft (60,000 m2 NIA) added to the City's skyline.
The scheme is targeting BREEAM Outstanding and net zero carbon emissions in operation. Sustainability features include 'vertical urban greening' to mitigate air and noise pollution. The building will offer flexible office space and state-of-the-art technology and amenities, aimed at enhancing occupier health and wellbeing.
Designed by Eric Parry Architects, the fully consented redevelopment plans include the retention of the Tower of All Hallows Staining and Lambe’s Chapel Crypt, two historic listed buildings currently on the site, which will form part of an extensive new public realm with retail and dining at ground level, while a new Livery Hall will also be delivered for The Clothworkers’ Company as part of the development.
YardNine will act as the development partner for the project, with construction due to start in 2024 and delivery targeted for 2028.
Occupying a 1.2 acre site in the City of London, 50 Fenchurch sits on the southern edge of the City’s tower cluster, providing river views to the south and south-east over the Tower of London and Tower Bridge.
AXA IM Alts said it will draw on its development experience at nearby 22 Bishopsgate, where over 93,000 m2 of space has been let little more than a year after the 62-storey vertical village’s completion, reaffirming its conviction in the strength of demand for sustainable workspace in the heart of the City of London.
Isabelle Scemama, global head of AXA IM Alts, and CEO AXA IM Real Assets, said: ‘Since the pandemic there has been a pronounced increase in demand from occupiers for high quality, sustainable and wellness-focussed offices. We have seen this first hand at our flagship development 22 Bishopsgate which is now 80% let and expect this flight to quality to become even more acute over the coming years as businesses adapt to new working patterns.
‘50 Fenchurch presents us with another rare opportunity to secure a prime development site in the City of London, which we continue to believe is one of the most desirable office locations in the world. Our team’s track record in development and ability to execute complex transactions quickly and with certainty for the counterparty have been pivotal in securing this new flagship investment.’
Maxwell Shand, director of YardNine, which also worked on nearby office building EightyFen, commented: 'Occupier demand for high-quality space that aligns with their ESG and flexible working policies is only set to continue in the years ahead and we very much look forward to working with AXA IM Alts to bring this iconic development to London’s skyline.'