Exactly two years after it secured multi-million backing for its 317,000 sq ft City of London office scheme Aldgate Developments has accepted a second cash injection. This time the US private equity firm Starwood Capital is investing £200m in the project.
Originally unveiled in January, 2013, the development firm confirmed it was receiving £85m in loans from Helios Capital and the GWM Group for its 18-storey office tower at 10 Whitechapel High Street.
Claimed to be the first speculative City build since the recession, Aldgate is now believed to have pre-let 40,000 sq ft to a marketing company while the controversial car-sharing firm Uber is reportedly in negotiations to take space in the building. BSkyB is also said to be in talks over the possibility of relocating its head office.
The building, on the edge of the City of London, is expected to be worth up to £200m on completion. It was expected to be ready to accept tenants by the middle of last year but, although groundwork started on schedule, there have been considerable delays.
The latest Starwood investment has been used to refinance the existing £85m loan with Helios Capital and GWM Capital, both of which will be paid back the entire amount, plus about £25m in interest and fees.
In an early-January Stock Exchange announcement, Starwood European Finance — a listed property fund controlled by Starwood Capital — explained the facility “will support the acquisition and stabilisation through lease-up of the property”.
After suffering a sharp drop-off in office development during the financial crash, the Aldgate area of east London has been one of the big rebound beneficiaries as prospective tenants search for Grade A office space outside the pricier areas of London.
Reporting to Tower Hamlets council last year, the developer said: “The office-led schemes of Aldgate Place and Beagle House have stalled … As a result of the current office market conditions and a review of the relevant planning permissions and policies in the area, Aldgate Developments believe that this is an important opportunity and a turning point in the regeneration of the Aldgate area which should now focus on creating a sustainable mixed-use heart.”
In addition to its Aldgate Tower scheme, Aldgate Developments is planning a 24-storey residential-led tower nearby containing 320 flats, 13,900 sq ft of retail and 2,800 sq ft of office space.
