Cisco walks away from 60 London Wall

Tech giant Cisco has walked away from a deal to take 100,000 sq ft at 60 London Wall, EC2, throwing the firm’s confidence in the UK into doubt once again.  Cisco, currently at 16-18 Finsbury Square, EC2, had agreed terms to take space at the 325,000 sq ft office scheme. But the exclusivity period for the agreement ended without a deal being signed. The office is currently undergoing redevelopment by LaSalle Investment Management and Citygrove Securities. The building will offer 30% more floorspace than the original premises and is due to be completed in June 2020. The scheme was bought from Deutsche Fonds Holding in 2015 for £197.5m. Cisco’s back-pedal comes as the firm is expecting a disappointing second quarter. It is forecasting revenue in its current quarter (27 October-25 January 2020) to drop by 3-5% from a year earlier to between $11.82bn to $12.07bn. In its Q2 forecast in November, chief executive Chuck Robbins cited Brexit as a key factor causing uncertainty for the company. He said: “Just go around the world right now and you look at what’s happening in Hong Kong, you look at the China-US trade situation, you look at what’s going on in DC, you’ve got Brexit, you’ve got uncertainty in Latin America… if they get resolved, then you could see some of the uncertainty removed, and I think business confidence just suffers when there’s lack of clarity.” Despite the political turmoil, Radius Data Exchange data shows the collapse of the London Wall deal has bucked take-up trends in central London. In the third quarter, occupational activity reached 3.4m sq ft, marking a 17% rise against Q2 and a 6% increase on the five-year quarterly average. Current Q1-Q3 take-up figures stand at 8.89m sq ft, close to the five-year Q1-Q3 average of 9.16m sq ft. It is not the first time Cisco has pulled out of a major UK office deal. In 2000, Prudential prelet more than 1m sq ft at its Green Park scheme in Reading, Berkshire, to Cisco. At the time, it marked the largest prelet outside London, with Cisco planning to turn the park into its European hub. Initially, it committed to 607,000 sq ft across five buildings, with options on the remaining 617,000 sq ft. But it ended up only occupying 150,000 sq ft. It subsequently struggled to sublet the remaining space, which remained empty for several years. A potential deal with international directories firm Yell fell apart in 2007, when both parties fell out over fit-out issues at the office. Ultimately, Oxford Properties bought Green Park for £400m in 2011, reaching an agreement with Cisco in 2012 to take back the remaining 517,000 sq ft of unoccupied space. To send feedback, e-mail lucy.alderson@egi.co.uk or tweet @LucyAJourno or @estatesgazette