DTZ - Offices Letting - London
Date: 01 Apr 2008
Global real estate adviser DTZ has signed a lease agreement with real estate investor and developer Hammerson to take 75,000 sq ft (7,000 sq m) for its new UK and global HQ at 125 Old Broad Street development in the heart of the City of London.
DTZ will take levels 1 to 4 and part of level 5 of the redeveloped former London Stock Exchange building, a joint venture between Hammerson, GE Real Estate and Bank of Ireland. The lease is for 20 years at a rent of £53.50 per sq ft. The annual rent is £4.0 million. A contribution towards fit-out and lease surrender costs of £11.7 million will be paid to DTZ in lieu of a rent-free period.
Some 600 staff will relocate to the new premises in the Autumn in a move which will see DTZ consolidate its current five Central London offices to three - 125 Old Broad Street, One Curzon Street & 48 Warwick Street. Following the re-organisation half of DTZ's London-based staff will be located in the City.
DTZ is working alongside Hammerson on the fit-out of the property which, like the relocation as a whole, will be carbon neutral. The property will also have a series of energy conservation and environmentally friendly technologies installed including energy recovery systems, an internal water plant and seven stream recycling, in keeping with the wider sustainability initiatives the company pursues in its own operations and for clients.
The state-of-the-art premises, located close to Bank tube station, and only half an hour from City airport, will provide premier in-house facilities for both staff and clients including a dedicated client area with a 120 seat auditorium, meeting and dining rooms, video conferencing and a refectory and terrace area. For staff there will be in-house catering, coffee shops and a substantial internal business lounge and global meeting point.
The deal has required the simultaneous execution of five property transactions involving the leasing of Old Broad Street, the surrender of the lease in Swallow Place (Oxford Circus), the termination of leases in Throgmorton Street EC2 and Farm Street W1, and the subletting of 30,000 sq ft (2,790 sq m) at One Curzon Street to GLG. The result of all these transactions is that the move is self financing and cash flow positive over the next five years, with a blended central London rental cost of just over £60.00 per sq ft. In effect DTZ has swapped exposure to potential rents on review in Mayfair in excess of £100 per sq ft by implementing a sophisticated multi-faceted property strategy to improve working conditions and reduce costs.
Robert Peto, DTZ UK & Ireland chairman comments: "In the search for our new UK and global HQ we were looking to occupy a world class building which matches the ambitions and drive of the company and 125 Old Broad St does just this.
"By reducing our London estate to three significant buildings we will be able to offer a more joined up and efficient service for clients, encourage business synergies, contain costs and provide our staff with the top quality accommodation that they deserve. This demonstrates our commitment to continued investment in our people and our infrastructure"
John Richards, CEO of Hammerson comments: "We are pleased to provide the new UK and global headquarters for DTZ at 125 Old Broad Street, one of the best locations in the City of London. This enables the company to rationalise its existing London properties. We are seeing encouraging interest in the remaining tower floors of the building and I am confident that this will prove to be a very successful development."
DTZ is representing itself and Hammerson is being advised by CBRE and Strutt & Parker.
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