British Land secured 222,000 square feet of lease recommitments and extensions with two tenants at its 201 Bishopsgate City offices during what it has termed a record financial year for occupier deals.
BL has extended the leases of Janus Henderson and law firm Mayer Brown to 2033 from 2028. The real estate investment trust, which owns the 416,000-square-foot office alongside Singaporean sovereign wealth fund GIC, said the transactions highlighted the limited supply of larger floor plates in the City and the attraction of remaining on the Broadgate campus.
British-American global asset manager Janus Henderson occupies around 134,700 square feet from the 8th to 12th top floors while Mayer Brown occupies 85,000 square feet of the first to third floors.
The lettings are significant wins for the REIT. Mayer Brown was understood to have shortlisted three buildings last year: One Exchange Square, alongside British Land and GIC's 2FA at the Broadgate Campus, or staying at 201 Bishopsgate.
Janus Henderson, advised by Knight Frank, had also been looking at options for a relocation.
British Land toasted what it termed record leasing across its offices and retail in full-year financial results today. The REIT was particularly upbeat about the London office occupier market.
In a statement unveiled with the results, Simon Carter, chief executive, said: "Our offer is clearly resonating with customers: we have around a 5% share of the London office market, but accounted for 15% of reported leasing activity last year, rising to 33% in the fourth quarter.
"While the geopolitical and interest rate backdrop has become more uncertain, the occupational fundamentals underpinning our portfolio are as strong as I have seen them. Central London office net take-up is at its highest level in 20 years and our retail parks are 99% occupied."
In February, Knight Frank reported that one third of current demand in the London office market is likely to stay put rather than move, as regears become an increasingly key structural feature of the market.
In a detailed dive into the trend, Laura Beatson, a partner in the London lease advisory team at KF, said: "We are seeing more renewal and regear activity than ever before. It’s an opaque part of the market but our team alone transacted on 2.5 million square feet of regears across London last year."
Beatson said that figure amounted to 44% of all Knight Frank transactions and includes three of the most significant market renewal deals, including EY recommitting to 400,000 square foot at 1 More London Place on the Southbank until 2040, and the London Stock Exchange recommitting to 240,000 square foot at 10 Paternoster Square.
The adviser said regears now account for 39% of all London office transactions, with 1.7 million square feet under negotiation. For requirements below 40,000 square feet, 25% are likely to stay put. But larger occupiers are much more inclined to remain in situ, with 46% of those requiring more than 100,000 square feet now likely to stay put, reflecting the growing complexity and cost of relocating large footprints.