Lincoln MGT, the joint venture between Lincoln Property Company and MGT Investment Management, is set to sign Centrica for 42,000 square foot of space as it moves closer to full occupancy at the first office building at its £850 million mixed-use Station Hill development in Reading, CoStar News can reveal.
Centrica, the British multinational global energy services and solutions giant which owns British Gas, is set to take the third and fourth floors of the building, taking it to 70% let. Centrica's portfolio of real estate includes around 100 buildings in the UK with its head office at Millstream, Maidenhead Road in Windsor in Berkshire, owned by Malaysian pilgrim fund Lembaga Tabung Haji, and London offices at Marble Arch Park House. It is thought that Centrica is planning to relocate from both.
Last year, CoStar News revealed that Lincoln MGT had completed the first 115,000 square feet of office lettings at the 283,000-square-foot One Station Hill.
PepsiCo signed for 38,255 square feet across floors 7 and 8, and a private terrace of 3,853 square feet. Professional services company PwC signed for 41,954 square feet across floors 5 and 6. And NewFlex, the flexible offices operator, took 31,765 square feet of space across floors 1 and 2.
PepsiCo has consolidated its existing office space, which is on the edge of Reading at Green Park, to the town centre building, while PwC has moved from premises a short walk away. The space is NewFlex’s first workspace in Reading.
Consumer health business Kenvue signed in February for the ninth and 10th floors totalling 34,500 square feet, as revealed by CoStar News. The letting to Centrica would leave 82,000 square foot available.
One Station Hill, designed by architect Gensler, is directly opposite the railway station and is a key part of major redevelopment plans for the town centre. The office building is arranged across lower ground and ground floors and fifteen upper floors, with terraces on floors 8 and 15.
The development has a number of facilities, including rooftop yoga, set in two acres of landscaped public realm and improved pedestrian access. It is an all-electric building using air source heat pumps and smart building technology, and targets BREEAM Outstanding certification, a Platinum WELL score and an EPC A rating.
Details of the terms with Kenvue, which pharmaceuticals giant Johnson & Johnson has a circa 10% stake in, have not been disclosed but market sources have said the letting to PepsiCo on the highest floors was at around £56 per square foot while PwC signed for closer to £54 per square foot, record rents for Reading. It is thought they signed 12-year leases.
One Station Hill forms part of a 2.5 million-square-foot mixed-use development, which includes a total of 625,000 square feet of offices and up to 1,300 homes, 598 of which have already been built in the neighbouring Ebb & Flow development. The project also includes 95,000 square feet of retail and leisure space.
In 2021, Lincoln MGT secured a £107 million construction loan from BGO for the second phase at Station Hill. The loan is funding the offices, a public square and a link bridge with level access from the train station to the town centre. The development includes a £50 million investment in surrounding infrastructure.
Hatch Real Estate and JLL are office advisers at Station Hill. BNP Paribas Real Estate is advising Centrica.
The Thames Valley market is the focus of a number of requirements expected to make decisions on moves imminently, including American mobile communications company Zebra Techologies, which via JLL is looking for around 40,000 square foot in Reading, 3M, which is closing in on a circa 40,000 square foot move in Reading, Siemens, which is reviewing options in Maidenhead, and Deloitte which is also looking in Reading and Maidenhead, both for around 40,000 square foot.
Lincoln MGT took on the project in 2018. It is understood to have paid around £68 million for the opportunity with backing from Baupost.
In January 2011 the Station Hill development was bought by private equity firm Benson Elliot and Stanhope after long-term owner Sackville sold a majority stake in the scheme, but retained a small interest. Their plans replaced long-running plans from Reading Football Club tycoon John Madejski’s Sackville for a 1.7 million-square-foot scheme comprising a 22-storey tower, 870,000 square feet of offices, 243,000 square feet of retail and leisure and 650 flats which obtained planning consent in September 2010.