BlackRock rent Drapers Gardens with lower free period

February 8th, 2010 admin

Fund manager BlackRock has signed a lease for Drapers Gardens office that includes about 290,000 sq ft of office space that was formally owned by Exemplar Developments and the Canary Wharf Group. The lease is for 25 years at a rate of £49 per square foot over a 23 year period with the first three years rent free.

Insiders in the property world see the move as a signal that the balance is starting to shift back in favour of landlords that in the past were forced to offer multiple year rent free deals to attract tenants into their properties.

Those involved in the deal remarked that it shows a large shift within the desk space London market, which over the economic recession has seen developments placed on hold, rents fall, and incentives for rents rise.

Vice chairman of BlackRock, Richard Kushel, stated that the new lease of Drapers Garden aligns with their needs perfectly.

A Cazenove broker stated that the rent free period that was assigned to BlackRock is much less than the deal set by Nomura for its new London Watermark Place headquarters in which they were able to secure a six year rent free period.

Formally Macquarie, an investment bank from Australia, attempted to secure a deal for the same property with the lower rate of £43 per sq ft for 24 years with the first four years rent free.

A subsidiary of Canary Wharf Group, Songbird, said that the rent will be reviewed in the open market five times throughout the course of the lease.

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