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