City of London approves third new skyscraper within a month

London

THE City of London Corporation has approved a third new office tower in less than a month as developers shrug off fears about the demise of the workplace.

British Land Co and GIC Pte Ltd's plans for a 38-story development at 2 Finsbury Avenue, the site of a former UBS Group AG office, were waved through by the district's planning committee on Wednesday. The project will provide about 83,000 square metres of new workspace in London's main financial district even as a series of banks have signalled plans to cut their office footprints.

Developers are betting that demand will endure for the best new buildings that can help businesses attract and retain staff once the pandemic is brought under control.

Years of Brexit uncertainty that deterred investors from pushing ahead with new projects have created a potential supply squeeze for sites that can accommodate large companies over the next few years.

"As businesses look beyond Covid-19, it is clear that high-quality workspace in great locations will continue to play a crucial role in their success, by promoting and supporting innovation, collaboration, training and culture," Nigel Webb, British Land's head of development, said in an emailed statement following the vote.

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Still, a slew of finance firms including Lloyds Banking Group and HSBC Holdings have this week disclosed plans to slash office space and cut costs. The downsizing threatens to create a glut of second-hand office space that's likely to weigh on rents in London's twin financial districts, according to research published by broker Carter Jonas.

British Land has led an overhaul of the Broadgate estate next to Liverpool Street station, pivoting it away from a reliance on financial services tenants.

The developer is in the process of redeveloping a series of buildings vacated by UBS after the bank moved into a new headquarters on the campus in 2016.

The approval comes after the City voted in favor of two other developments proposed by Tenacity International on nearby Gracechurch Street in recent weeks. BLOOMBERG