Thwe FINANCIAL — British Land and Blackstone are pleased to announce they have satisfied the remaining outstanding conditions on the agreement with UBS AG to pre-let 5 Broadgate and now that the agreement is unconditional, development of the new 700,000 sq ft building will proceed, according to London Stock Exchange.
Demolition of the existing 4 & 6 Broadgate buildings is well underway and will be completed in April, with delivery of the new bespoke building on schedule for Q4 2014. The Joint Venture has already placed or tendered around 60% of the project's construction costs within budget and programme.
UBS will lease the entire building for an average of 18.2 years to first break at an initial rent of £54.50 per sq ft subject to annual increases in line with RPI. UBS will be given a rent free period of 18 months.
As part of the agreement, UBS has also deferred exercising lease break options on 755,000 sq ft of existing space which they currently occupy at Broadgate until 18-36 months following practical completion, to allow the new building to be fitted out.
The earliest date that UBS can break the leases is towards the end of Q2 2016. Deferring the lease breaks will ensure that the Joint Venture receives a further £74 million of rent, approximately £32 million of this was agreed by UBS on signing of the conditional agreement in 2010, as part of a package of negotiated lease amendments.
Discussion about this post