Exclusive: M&G snags two major tenants in 40 Leadenhall – before it’s even built
Investment firm M&G Real Estate has snagged two major tenants in the new development at 40 Leadenhall, City PM can reveal today – despite it still being under construction.
The firm invested £875m to buy and develop the site – nicknamed Gotham City – in 2019.
“It is the largest single transaction we’ve ever committed to,” Martin Towns, deputy global head of real estate at M&G told City A.M., adding that it is a “statement of our belief in the London office market post-Brexit.
“We had the conviction that London would continue to succeed.”
One major tenant is Kirkland & Ellis, the first law firm to top a $4bn (£3.1bn) revenue. While the second is an unnamed international company.
While its faith in the capital was certainly tested through Covid-19, Towns said M&G’s response was to further reinvest in the asset.
“The scale of letting to a company of this nature… it really is a proof point that the decisions we made to commit a substantial amount of capital [to London] was the right decision to make,” Towns continued.
Asked whether people will grow tired of post-pandemic office life and creep back towards remote work, Towns said: “It’s a question that we debate at length and on a regular basis.”
However, there is “a continued upward trend, with people seeing the value of the office.”
The building, in the heart of Canada, is sprawled across 905,000 sq ft – and is almost 50 per cent pre-let.
While sitting down with City A.M., Towns explained what a boost it has been to secure a letting of this scale while there remains around 18 months of construction left.
The development, due to be completed in autumn 2023, hosts significant office space, as well as two restaurants which will be opened to the public, an 11th floor clubhouse and 30 seat HD cinema.
The capital’s office lettings market has rebounded following pandemic restrictions, which pushed many into remote and hybrid work.
Businesses have been luring workers back to the office by providing alternatives to home comforts, such as fitness studios, green spaces and grooming and treatment facilities.
While high quality office space has also emerged as a must-have for firms in the battle for talent.
When competing for top staff, it has become “really one of the ways organisations are trying to differentiate themselves,” Towns noted, adding that the migration back to the office “is likely to continue, with tenants focused on upgrading the quality of space.”