Office Blow for Hammerson

Office move cancelled for 2015: Long term planning can go awry.

Hammerson's Principal Place

CMS Cameron McKenna has cancelled plans to move into a new City skyscraper still under development due to the ongoing problems in the global economy.


Hammerson, the building's developer, issued a stock exchange announcement earlier (16 January) stating that the firm had pulled out of discussions to take on around one-third of the space in its new Principal Place skyscraper in 2015.


CMS, which agreed an initial pre-let deal with Hammerson last summer, said it was postponing the move due to the market uncertainty, with the firm now planning to explore its options nearer the end of its current lease agreement on Mitre House in Aldersgate Street in the City in 2015.


CMS senior partner Dick Tyler said: "As a result of the current uncertainties in the financial markets, CMS Cameron McKenna has decided not to enter into a significant long-term premises commitment. The firm is therefore ceasing its current conversations with Hammerson in relation to its development at Principal Place, EC2."


"The firm proposes to postpone its decision to move until market conditions are more stable. The firm's lease of Mitre House in Aldersgate Street expires in 2015 and it will explore its relocation options in London nearer the expiry date."


CMS was the first pre-let agreed to date for the Principal Place skyscraper, which Hammerson is aiming to complete in 2015. The building was granted planning permission in July 2011 and is part of a mixed use scheme that will include shops, restaurants and residential apartments.


The firm had been looking to take up to 200,000 sq ft in the 591,000 sq ft office building, which will be located a few minutes away from Liverpool Street station and Spitalfields, north of Bishopsgate.


Hammerson chief executive David Atkins commented: "I have consistently said that in current conditions we would not expose our shareholders to excessive risk through building London offices on a speculative basis, which remains our policy.


"We have made good progress with the design and planning of Principal Place over the last six months, which I am confident will further improve its appeal to potential occupiers, and we continue actively to seek office tenants. We are clearly disappointed by CMS' decision, but understand their position."

Source Legal Week