Developer behind Timber Square and Hill House schemes says occupiers want best in class buildings

Landsec has said that central London offices which do not hit certain criteria such as sustainability credentials and transport connectivity “risk becoming obsolete, almost regardless of price”.

The firm behind the £250m Hill House development, set to be built by Skanska, said occupiers were becoming more demanding about what sort of offices they were prepared to take space in.

It said: “Customer demand remains firmly focused on buildings with the best sustainability credentials, transport connectivity and local amenities.


Tenders for the Red Lion Court scheme are due out this autumn with the construction contract worth around £200m

“The amount of space which meets these criteria remains limited, so pricing of this continues to go up, whereas space which does not meet these criteria is at risk of becoming obsolete, almost regardless of price.”

Earlier this year, Deloitte’s senior advisor for real estate, Tony McCurley, told Building that occupiers were wanting the best available space for several reasons including meeting ESG targets, being able to attract and retain talent and encourage staff back into the office.

“There is very, very strong demand for the highest quality grade A space,” he added. He described some grade B space as “stranded assets” and admitted: “There is no depth of demand for grade B space.”

Landsec said that 77% of its London portfolio is located in the West End and Southwark, up from 58% in 2020.

It said it had increased its focus on multi-let clusters in the West End and Southbank because “large HQ space and areas which lack the amenities to make people want to spend time there are most at risk as a result of more flexible ways of working”.

Landsec, which narrowed pre-tax losses from £622m to £341m for the year to March, said it expected activity levels to pick up with interest rates stabilising.

The firm said it has begun work on the £400m Timber Square project, designed by Bennetts Associates, which is being built by Mace.

And McLaren has begun work to refurbish a 1960s office block called Portland House in London’s Victoria under a new £380m plan drawn up by Buckley Gray Yeoman. The scheme has been renamed Thirty High.

Landsec’s job to replace a 1980s office building on the banks of the river Thames at Bankside in Southwark is expected to go out to tender this autumn. The deal is set to have a construction cost of £200m.

Red Lion Court, which has a total development cost of £335m, will involve building 230,000 ft of workspace along with retail and new public space.

Firms working on the scheme designed by BIG include cost consultant Gardiner & Theobald, project manager CPC, M&E engineer Hilson Moran, structural engineer AKT II and sustainability engineer Arup.