AXA Investment Managers - Real Assets (AXA IM - RA) has revealed that it will continue construction of its 64-storey skyscraper 22 Bishopsgate in the City of London after a report the project had been put on hold due to initial post-Brexit nerves.
The scheme had received full planning permission from the City of London Corporation on 16 June 2016, but the result of the UK referendum left the development's future in doubt.
'Our ongoing commitment to 22 Bishopsgate reflects our firm belief, and that of our clients and partners, in this development project, aligned to the fact we are taking a long term view of this investment,' commented Pierre Vaquier, CEO of AXA IM - RA.
'The decision to proceed underscores our confidence in the progressive and attractive development that we will deliver at 22 Bishopsgate, coupled with the anticipated breadth of demand from local and global occupiers for easily accessible space in a prime location in the City of London, as one of the leading global centres for international business, that will respond to their future business needs,' Vaquier added.
Alongside its development partner Lipton Rogers, AXA IM - RA is expected to finalise the appointment of a contractor for the main build of the tower within the next few weeks, with a view to commencing work straight after. Significant preparatory works have already been undertaken on the site, including substantially completing the foundations and ground works, utilising elements from the previous unfinished development.
The 128,000 m2 office scheme is designed to accommodate up to 12,000 workers and is expected to be completed in 2019. It will be the first UK building to apply for the Delos WELL Building Standard, in line with AXA IM - RA's targets to certify 75% of total direct property under management with reputable sustainability labels by 2030.
The 22 Bishopsgate project helped sum up the dilemma for developers in the UK in the wake of the British public voting to leave the European Union. Soon after the referendum on 23 June the Financial Times reported that AXA had delayed work on tower.
In response, AXA denied that work was halting, but at the time Anne Kavanagh, AXA IM's global head of asset management and transactions, conceded that the company was considering all its options.
From Pinnacle to Bishopsgate
The project started life under different developers as The Pinnacle but construction ceased in 2012. In February 2015, AXA Investment Management – RA bought the part-developed site from Pinnacle No 1 Limited, paying around €400 mln on behalf of an international consortium of investors including Malaysian Temasek Holdings. With partner Lipton Rogers Developments, AXA formulated new designs for a 62-storey 'integrated vertical city' using The Pinnacle’ s already constructed foundations and lower levels. Plans went on show in June 2015 and the building was destined for completion in 2019.
At the time the insurer bought the site Kavanagh said: ‘Our commitment to develop 22 Bishopsgate is driven by London’s status as one of the pre-eminent world cities and its continued capacity to generate employment and growth.’
In the wake of the Brexit vote, Kavanagh said AXA would take stock of the current situation. 'The main challenges are always related to occupier demand and whether businesses will wait before making any investment decisions and the fact it’s currently difficult to ascribe a true valuation to assets although the market is becoming increasingly liquid.'
