Hammerson scheme stalls after tenant pulls out
Hammerson has put construction of the £290m Principal Place tower in London on hold after anchor tenant – law firm CMS Cameron McKenna – pulled out.
A source close to the scheme said procurement for a contractor to build the tower would go ahead but Hammerson stressed construction would not begin until a replacement tenant was found.
Construction of the 50-storey Foster + Partners-designed scheme was due to begin in April.
Hammerson had agreed initial head of terms with CMS Cameron McKenna for 18,600m² out of a total 55,000m² of offices available.
The tower, which will also include 298 flats, gained planning approval last July.
Dick Tyler, senior partner at CMS, said: “As a result of the current uncertainties in financial markets, we decided not to enter into a significant long-term premises commitment.
“We have been working well with Hammerson, and Principal Place will be a high-quality head office in an excellent location, however we will postpone our decision to move until market conditions are more stable.
“The firm’s lease of Mitre House in Aldersgate Street expires in 2015 and we will explore our relocation requirements in London nearer the expiry date.”
David Atkins, chief executive of Hammerson, said the developer would not “expose our shareholders to excessive risk through building London offices on a speculative basis.”
He said: “We have made good progress with the design and planning of Principal Place over the last six months, which I am confident will further improve its appeal to potential occupiers, and we continue actively to seek office tenants.
“We are clearly disappointed by CMS’ decision to postpone their relocation until market conditions are more stable, but understand their position.”