Singaporean developer Perennial Real Estate has secured a call option to acquire a 20% stake in the £1bn development at 1 Undershaft, EC3.
The property and healthcare company has struck a deal to secure a right to acquire the stake in Aroland Holdings, the British Virgin Islands-incorporated company which owns the existing building and has received planning consent for a new 1,000 ft tower.
The deal is based on an agreed property value of £330m and allows Perennial to buy the stake at any point before 31 July 2019.
Aroland won planning consent in November to redevelop the existing tower into a 73-storey scheme comprising 970,000 sq ft of office space. Once built, it will be the tallest building in the City.
Perennial will manage the redevelopment of Aviva Tower upon confirmation of the execution of redevelopment plans by Aroland.
Perennial chief executive Pua Seck Guan, said: “The call option provides Perennial with an exceptional opportunity to gain access into a new developed market and own a piece of prime freehold real estate in the City of London.
“Despite Brexit, the rental and prospects for quality office space in the core financial district remains strong in view of its unrivalled prime location and excellent transport connectivity, and backed by robust business demand.
“Given that the current transacted value of prime office space in London’s central business district averages £1,500 per sq ft, the redevelopment scheme will create development value and Perennial will enjoy the upside potential via the call option.”
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