Pearson has launched a review of its London office portfolio, making way for the sale of the Financial Times’ headquarters at 1 Southwark Bridge, SE1.
The publisher has instructed Gryphon Property Partners to advise on its central London holdings, which include the freehold of the 154,505 sq ft office building overlooking the River Thames.
The FT, which was previously owned by Pearson before its 2015 acquisition by Japanese media company Nikkei, is due to start vacating the building at the end of 2018. It will move into new offices at Obayashi Corporation’s Bracken House, EC4.
The move is likely to lead to the sale of the block, which has long been considered one of the best development opportunities in central London. It has traditionally be seen as a prime residential redevelopment opportunity, but market sources said that the maturing South Bank office market meant that the most valuable use for the site was now less clear and could ultimately be mixed-use.
The neighbouring 157,144 sq ft office building, Rose Court, was sold earlier this month by Ho Bee Land to a Guernsey property unit trust for £94.5m. It is expected that the FT building would attract a similar price.
Prior to the FT’s sale Pearson had engaged DTZ, now part of Cushman & Wakefield, to advise it on a potential move that would free up the site. Early discussions with Southwark Council around granting a residential consent had centred on the need for the paper to move within the borough and for a new office to be developed to offset the loss of business space. Now the FT is under separate ownership and has moved to the City it is not clear what the council’s position is.
Aside from 1 Southwark Bridge, the publisher is also the majority tenant at Sirosa’s 550,000 sq ft Shell Mex House, WC2, where it holds a lease expiring in 2040 with no breaks. The publisher also occupies the entire 84,000 sq ft 190 High Holborn, WC1, on a lease expiring in 2023, which is owned by a Middle Eastern family.
Options under consideration include “northshoring” some staff to a regional city or consolidating into one office.
Pearson issued a profits warning in January following what it described as a “further unprecedented decline” in its US higher education courseware business.
It also announced a portfolio restructure, including the planned sale of its stake in publisher Penguin Random House.
A Pearson spokesman said: “We are exploring opportunities to rationalise our property portfolio, as we committed to do in January 2016 as part of Pearson’s growth and simplification strategy. A review of our London property portfolio is at an early stage and no decisions have yet been taken.”
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