Landsec is in talks to sign multinational oil and gas company BP for around 200,000 square feet of offices at Timber Square, a £200 million, highly sustainable office in London's Southwark, CoStar News can reveal.
The pioneering development proposes 380,000 square feet of net zero offices and is one of the few major office developments the REIT has committed to as it pivots towards major retail investments and residential development.
The move is understood to be in addition to space it already occupies in London at Canary Wharf. The group has multiple offices in the UK including a 600,000-square-foot International Centre for Business & Technology in Sunbury-on-Thames.
CoStar News revealed in June 2020 that BP Oil had taken around 230,000 square feet at the Cargo building in Canary Wharf. The company prelet the space, next door to Canary Wharf’s Elizabeth line station, moving from the 240,000 square feet it occupied nearby at 20 Canada Square on the Docklands estate. Blackstone is understood to be testing the market about a sale of the building.
Timber Square is reusing elements of the existing printworks and a range of modern methods of construction such as cross-laminated timber, to achieve a 50% reduction in carbon dioxide during construction compared with a typical office build. It retains 85% of one of the existing structures and reuses building materials wherever possible. Once complete, it will become one of the most significant commercial developments in the UK to use a hybrid steel and CLT structure.
The space, which has been designed to maximise occupier wellbeing, will target BREEAM Outstanding and Well Core Platinum. It will have a rooftop communal terrace and clubroom, a number of private terraces and new public realm including a mix of retail, leisure and food and beverage close to Borough Market.
Landsec has a long history in Southwark which began with the redevelopment of The Blue Fin Building and Bankside 2 and 3 over a decade ago. Earlier this year, the company and Mace completed work at The Forge, the first office in Landsec’s Southwark pipeline to be delivered and the UK’s first net zero commercial building designed in line with the UK Green Building Council's framework.
In full-year results published in May, Landsec confirmed it was accelerating its shift away from offices towards retail and residential.
Landsec said it would increase investment in major retail by another £1 billion and establish a £2 billion-plus residential platform by 2030, to be funded by rotating £3 billion of capital out of offices, non-core investments and low or non-yielding pre-development assets. The group will not start any more speculative office development until its two major under-construction projects in London at Thirty High and Timber Square are substantially leased.
CBRE and JLL are the retained leasing agents for the scheme. JLL is advising BP.
BP, JLL and CBRE declined to comment.
Landsec said in a statement: "We won't comment on market speculation but we continue to see strong demand for best-in-class workspaces across prime locations in London. The team remains focused on the delivery of our two committed developments, Timber Square and Thirty High, ahead of completion in March and July this year."