Hammerson, the British REIT, is expected to soon announce a new deal over the Square Mile site originally chosen by JP Morgan for its global headquarters.

In 2007, a conditional agreement was reached at between the two companies along with the City of London. Under the terms of the agreement, Hammerson was supposed to undertake sole responsibility for the development of a million sq ft of office space in the prime Square Mile area of London to build a headquarters complex for JP Morgan. The investment bank was going to take over the property once it was completed.

However, during evaluation of the final plans for the site, it was found that the site and the planning done for the project did not meet the requirements of the bank. JP Morgan promptly changed the site to Riverside South in Canary Wharf, where a bigger layout was planned. This unfortunately left Hammerson saddled with ₤17 million worth of losses due to various activities undertaken for the development of the site.

Hammerson now seems to have reached an agreement with the City of London to take over the complete responsibility of the site in order to recover some of its losses. The terms of the deal are not out yet, but it seems that there will be no initial payment. No final figures have been discussed so far.

The price is difficult to estimate presently as the recent economic downturn has seen a rise in vacant desk space, especially in the premium market areas. Rental values and incomes have gone down as a result, and are not expected to stabilise at least until 2011.

This entry was posted on Wednesday, September 23rd, 2009 at 4:07 am and is filed under Corporate Evangelism, Real Estate Center, Your Business. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.