LONDON Jan 16 London's commercial
property market suffered another major setback as a deal fell
through to let one of the biggest future office schemes in the
City financial district.
Anglo-French developer Hammerson said law firm CMS
Cameron McKenna has pulled out of talks to pre-let a third of
the 600,000 square feet, 485 million pound ($741 million)
Principal Place scheme in Shoreditch, which a source said will
delay the April start date for construction.
The central London commercial property market, which rallied
between summer 2009 and autumn 2011, is now starting to feel the
effects of economic uncertainty.
Five central London skyscrapers being developed by firms
including Land Securities and British Land
have only signed one office pre-let deal between them.
London developers are looking to exploit a shortage of top
quality offices in the City district but have struggled to
attract tenants amid the global financial turmoil.
"I have consistently said that in current conditions we
would not expose our shareholders to excessive risk through
building London offices on a speculative basis, which remains
our policy," Hammerson's Chief Executive David Atkins said in a
statement on Monday.
At 1123 GMT, shares in Hammerson were down 0.7 percent,
underperforming a 0.3 percent fall in the broader index of UK
"If this means Cameron McKenna are definitely out of the
market rather than going somewhere else it doesn't bode well for
City tenant demand this year," said Alan Carter, an analyst at
Wealth manager Schroders shelved a deal to move into the
Walbrook building near the Bank of England at the eleventh hour
recently due to the uncertain economic outlook.
($1 = 0.6542 pound)
(Reporting by Brenda Goh; Editing by Chris Wickham)