13 June 2008 – Property Week
Retailer signs for 170,000 sq ft and Crown Estate buys 60 flats at Merchant Square scheme
Marks & Spencer has committed to keeping London’s Paddington as its headquarters by leasing 170,000 sq ft of expansion space at developer European Land’s Merchant Square scheme.
In the biggest deal in the West End for three years, M&S has signed up for 170,000 sq ft of offices at the 262,000 sq ft Carmine building, which is next to its existing Waterside House headquarters.
Property Week reported in April that M&S was looking at expansion space in the building.
The company has taken seven floors in the 15-storey building for 30 years, and is believed to be paying around £53.50/sq ft.
An M&S spokeswoman said: ‘This is a long-term rental agreement that will reaffirm our commitment to Paddington, allowing us to consolidate our head office operations here into two buildings.
‘It will also support the long-term growth of the business and avoid us having to acquire space in a third building at some point in the future.’
Carmine, which was designed by Mossessian & Partners, is due to reach completed in March 2010.
European Land, which is a joint venture between the Reuben brothers and the family of Bruce Jarvis, has also sold 60 flats in its West End Reach building on North Wharf Road to the Crown Estate. The Crown has bought the units off plan.
‘We believe demand will remain strong for prime central London residential apartments to rent,’ said Jim Yates, head of the Crown’s regional and residential portfolio.
‘This sends a strong message about our intentions in the residential sector – namely, providing the price and quality is right, we are still looking for attractive investment opportunities.’
The deal is part of the Crown’s new residential investment strategy, as revealed to Property Week in February, to buy homes to rent outside its prime core area of Kensington and Regent’s Park.
European Land has also sold another 44 flats to Octavia, the registered social landlord, in the West End Reach building for £9m.
Merchant Square, which is due for completion in 2012, will create six buildings providing 1.8m sq ft of residential, retail and office space. The scheme features 554 homes, of which 30% is affordable housing.
The deals are further good news for an area experiencing a surge in occupier interest. Statoil last week confirmed it would take 55,000 sq ft at Development Securities’ One Kingdom Street, while Vodafone is thought to be in talks to take 40,000-60,000 sq ft.
DTZ acted for European Land on the M&S letting; King Sturge advised on the residential sales.