Make’s contentious, high-rise 46,450m² London Wall Place project for developer Hammerson is on hold until a tenant can be found
The delay to the scheme emerged as the commercial property giant announced it was selling off its office portfolio to concentrate on retail developments.
A spokesperson said building work on the Make project, which was approved by planners last June (AJ 27.06.11) despite vocal local opposition and which was originally scheduled to complete in 2014, would not start until a pre-let had been secured.
Meanwhile, following the release of its trading figures for the year to 31 December 2011 earlier today (24 February), Hammerson confirmed it would be selling its existing offices ‘in the medium term’ and investing the money in shopping schemes.
The company said it had a small number of London office projects and mixed-use sites generating high returns where it would continue to invest in order to increase the value of the schemes. They added that it may use funding or joint venture investment to reduce risk and its commitment on some projects.
Other office developments include Principal Place designed by Foster + Partners, which also hit the buffers earlier this year (AJ 17.01.12) after a deal between Hammerson and tenant CMS Cameron McKenna broke down.
UK offices brought in £39.1 million of the group’s like-for-like net rental income in 2011 compared with £188.3 million raised by its UK retail schemes, an increase of 4.6 per cent for shops but a fall of 6.8 per cent for offices.
The group’s profit before tax fell from £620.2 million in 2010 to £346.3 million in 2011. The group said the reduction was largely due to a much smaller rise in the porfolio’s valuation in 2011 of £186.3 million compared with £447.1 million in 2010.
David Atkins, chief executive of Hammerson, said: ‘Following the review of our strategy we will focus on being the best owner-manager and developer of retail property within Europe. Hammerson has created a retail business delivering outperformance from prime assets in winning locations. We now intend to sell our standing office investments over the medium term to maximise returns, redeploying capital into the retail sector to exploit our expertise and build on our existing scale. This will create efficiencies that lead to further cost savings and income growth from our portfolio.’