Mishcon’s Africa adventure - Jack Sidders @ Estates Gazette

Mishcon de Reya has settled on Grade II listed Africa House on London’s Kingsway to end a long-running search for a new HQ, sparking a redevelopment play for its previously earmarked option. The law firm has gone under offer to let the entire 120,000 sq ft refurbished office block at 64-78 Kingsway, WC2, from Freshwater. Quoting rents are £59.50. The move has allowed Cheyne Capital to buy Mishcon’s spurned option at Salisbury Square House, EC4, from Deka for a major redevelopment play. Mishcon has repeatedly looked to take advantage of lease breaks and move into a single building since 2008. Its latest requirement was launched in July 2012. It entered complex negotiations with Delancey and Deka last autumn to prelet 115,000 sq ft at Salisbury Square House. That deal would have seen Delancey form a joint venture with Deka to fund and manage a refurbishment of the building. However, with current tenant KPMG’s lease not due to expire until 2015 and Mishcon’s break on 44,000 sq ft at Summit House, WC1, coming up in March 2017, the timeframe proved too tight to pursue the deal. Cheyne Capital and Greycoat have now placed Salisbury Square House under offer for around £65m with plans to pursue a comprehensive refurbishment when KPMG departs for Canary Wharf next year. Colin Hargreaves, a founding partner of Gryphon Property Partners, said: “The Mishcon de Reya deal highlights occupiers’ growing awareness of the chronic lack of supply and will only add to investor appetite for good refurbishment and redevelopment opportunities like Salisbury Square House.” The complex series of deals ends more than a decade of speculation about Mishcon’s occupational plans and several years of questions about Deka’s intentions for Salisbury Square House. The law firm entered talks with Castlemore Securities in 2008 to let around 100,000 sq ft at 40 Holborn Viaduct, EC1, before considering a move to Great Portland Estate’s 12-14 New Fetter Lane, EC4, in 2012. Other options it examined include Blackstone’s Lacon House, WC1, and King’s Cross Central, N1. Deka first considered selling the Land Securities-developed Salisbury Square House in 2010, when it appointed CBRE and Savills to find a buyer for £68m, reflecting a 6.5% yield. Edward Charles & Partners represents Mishcon; Montagu Evans and JLL are letting agents on Africa House; DTZ is advising Cheyne and Greycoat; CBRE