Construction works continue to progress positively with the building now around 40% complete, reports GPE.
In September, GPE pre-let all of the office space within the development to Facebook, who will occupy the entire office building (known as One Rathbone Square) on a 15 year term without breaks from practical completion (shell and core condition, scheduled for March 2017).
Facebook will pay an initial rent of £16.9 million per annum on the 227,300 sq ft of currently consented office space, equating to an average of £82.90 per sq ft for the upper six office floors (182,300 sq ft) or an overall average rent of £74.35 per sq ft when including the basement and ground floors (45,000 sq ft). This is 7.5% ahead of the ERV of the equivalent office space at 31 March 2015. The total rent will increase to £17.8 million per annum should GPE receive planning consent for change of use of a further 15,500 sq ft of space to offices. Facebook will receive 30 months rent free from completion of the offices to a shell and core condition and will receive a capital contribution of £52.90 per sq ft towards carpets, floorboxes and fitting out the reception and the offices to a Category A condition.
GPE has also agreed to provide Facebook with expansion opportunities within the GPE portfolio, as follows:
· At 73/89 Oxford Street, W1, Facebook has a right of first offer to pre-let all the 42,600 sq ft of office space, known as 1 Dean Street, W1, on coterminous leases with One Rathbone Square; and
· At Oxford House, 76 Oxford Street, W1, subject to GPE obtaining planning consent from WCC for a comprehensive refurbishment of the building, Facebook will have a right of first offer to pre-let all the anticipated 55,700 sq ft of office space on coterminous leases with One Rathbone Square.
The successful pre-letting of the entirety of the office space together with the sale of 132 out of the 142 residential apartments has helped to significantly de-risk the scheme with 84.5% of the gross development value now either pre-let or pre-sold.
The project is due to complete in June 2017 and, based on current market assumptions and post allowance for overage arrangements, is expected to deliver GPE a pre-tax profit on cost of 25.4% (up from 15.7% expected on the commitment to the scheme in spring 2014).
Source: Great Portland Estates plc Half Year Results 2015 www.gpe.co.uk