HAMMERSON plans to start work on a £200 million redevelopment of the former London Stock Exchange tower in the City next year.
The property firm, which jointly developed the new Bull Ring shopping centre in Birmingham, announced yesterday that it will shortly submit a revised planning application, with a view to starting work on the tower in the second half of next year.
Hammerson said it planned to build the project speculatively, without any tenants lined up, to take advantage of improving conditions in the stricken City office market.
John Richards, chief executive, said the City market, which has seen rents plunge by more than 20 per cent since 2001, had “turned the corner” but he cautioned that it would take until next year before rents started to rise.
In the West End of London, meanwhile, rents for prime locations have continued to rise since the first signs of recovery emerged in May this year. Hammerson has recently agreed a letting with Associated British Foods to rent an office at its new development at 10 Grosvenor Street for an estimated £80 per sq ft.
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Hammerson reported a 5.1 per cent rise in its underlying net asset value (NAV) per share, the benchmark performance indicator for property companies, to 844p in the six months to June 30. Underlying pre-tax profits fell 3.4 per cent to £42.2 million after the company took a £7 million hit from financing and void costs on three office developments.