Investors scramble for ITV’s former HQ in Brexit fog

In an investment market visibly constrained by the continuing shenanigans around Brexit, property on London’s South Bank is still the talk of the industry. ITV’s former headquarters in Waterloo, with its 100m River Thames frontage and planning permission for a 31-storey residential tower, has defied investor gloom around Brexit to attract interest from multiple parties. A shortlist of up to five candidates is heading into final bids next week – coinciding with unprecedented political insecurity over Brexit, with the UK’s armed forces reportedly activating a team in a nuclear bunker under the Ministry of Defence. On Monday, the government is preparing to enter “very high readiness mode” for a no-deal Brexit as Theresa May plans to run her deal past MPs for the third time. Despite this, investors and developers have continued to swarm around the London Television Centre. EG understands around 15 bids were submitted in the first round of bidding, with some of the suitors bidding over ITV’s £150m sale tag to up to £165m. Names linked to the 2.5-acre site include the Kirsh Group – which own the former NatWest headquarters, Tower 42, in the City – as well as Warner Bros, Seaforth Land, the Ofer family’s Global Holdings, which also owns the Sea Containers building down the road from ITV on the river front, and CC Land and Native Land. In addition Lendlease, Great Portland Estates and Neil Thompson’s new venture, Dartriver, are understood to have looked at the site, which went on the market with Knight Frank in January after ITV scrapped plans to redevelop the site itself. The South Bank has become one of London’s busiest investment hotspots, with nearly £1bn sunk into the submarket last year. This included US firm Starwood Capital closing in on South Bank Central for £255m and M&G swooping in to grab the Financial Times’s current headquarters for £115m, according to data from Knight Frank. The opportunities in the area even enticed Landsec out of its self-imposed acquisition hiatus late last year, with the purchase of 25 Lavington Street for more than £87m. Other South Bank trophies currently up for grabs include a redevelopment opportunity at Colechurch House by London Bridge, which the City of London is selling as a long leasehold. Competition has also been hot for the Waterloo site being sold by Savills on behalf of Guy’s and St Thomas’ Charity for £200m. It is now understood that the competition has whittled down to just Canary Wharf Group and Stanhope. But investing in the area is not without its risks, as Grosvenor and Endurance Land have discovered in recent months: both their schemes were denied planning permission. Grosvenor’s £500m BTR scheme was refused because of a lack of affordable housing, while Endurance Land and Angelo Gordon’s Friars House hotel plans were refused because of their alleged “adverse” impact on the area. Yet, developers need to be seen to be doing something to appease their shareholders. Meanwhile, investors have a lot of cash to squirrel away as interest rates look set to remain at historic lows. There is also a dearth of development set to come out of the ground after next year. As a result, occupiers are reportedly scrambling to search for new homes well ahead of any leases ending. In Q4 last year London office take-up totalled 3.84m sq ft – a jump of 11% on the previous quarter – and 2018 take-up as a whole was up 6% on 2017, according to data from Radius Data Exchange. So, while all investor eyes might be glued to Brexit news, there are several of them out there also playing close attention to the London Television Centre sale. Whether investment levels breach the £1bn mark again this year is another question, but it will be interesting to see who ITV’s rejected suitors attempt to win over next. Main image © ITV/Rex/Shutterstock To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette