(Sharecast News) – Great Portland Estates announced on Wednesday that it has secured the option to redevelop French Railways House and 50 Jermyn Street in SW1 with the Crown Estate.
The FTSE 250 company said the joint effort would aim to revitalise the historic St James’s area of London, and attract new brands, businesses, and visitors to the area.
Its existing leases for French Railways House and 50 Jermyn Street were set to expire in 2053 and 2057, respectively, with a combined fixed rent of Â£13,250 per annum.
However, if GPE exercised the option, it would gain a new headlease and development agreement spanning 129 years, with the new lease terms to be geared towards 10% of rents received.
In May last year, GPE obtained planning consent for an office-led redevelopment project at French Railways House and 50 Jermyn Street.
The company said it had enlisted Make Architects for around 66,800 square feet of grade-A offices spanning the first to the seventh floors.
Additionally, two retail and restaurant units would be situated on the ground floor.
The firm said the redevelopment would take circular economic principles into consideration by preserving the existing foundations and basement.
Additionally, the scheme would incorporate the reuse of structural steel from the deconstruction of GPE’s former building at 2 Aldermanbury Square, EC2.
“This is a brilliant opportunity for GPE and the Crown Estate to work in partnership to create best-in-class office and retail space in the heart of St James’s,” said GPE executive director Dan Nicholson.
“Sustainability is at the core of our redevelopment strategy and we are aiming to set a precedent for London by re-using over 1,000 tonnes of structural steel, creating premium spaces that deliver on the needs of our customers, into a market that is increasingly starved of such exceptional properties.”
At 0813 BST, shares in Great Portland Estates were up 7.1% at 431.4p.
Reporting by Josh White for Sharecast.com.