REIT British Land is close to agreeing a new deal for Swiss banking giant UBS to stay on at the Broadgate estate, home to almost 4 million square feet of London office space, retail and leisure accommodation.
The deal with UBS is enormously significant because the bank is the estate’s largest tenant, currently occupying six buildings. Under its present contract, UBS has a break option in 2014, leading to uncertainties for the REIT’s future revenue. UBS would lease around 600,000 square feet, bringing in around £40 million per year or 5 percent of British Land’s rental income, for up to 15 years.
It is likely that any agreement will see UBS move to 4-6 Broadgate, which will be completely demolished and rebuilt to modernise the space for the bank’s requirements. The estimated cost of £44 million is a modest price to pay for what some analysts have seen as British Land’s biggest challenge in securing its recovery.