British Land goes ahead with £286m development - commercial mortgages

24 May 2007

British Land has announced plans to go ahead with the multi-million pound development of a new skyscraper office block in London, despite challenging times ahead in the commercial property sector.

Chief executive Stephen Hester has predicted that the coming year will prove challenging in the commercial property market at large in a climate of declining price inflation, meaning that stronger rental growth is necessary for landlords to achieve better returns.

British Land''s new development is reported to be worth some £286 million, intended to provide premium office space to commercial tenants in the capital.

It is hoped that demand for prime office space in London will remain heavy from businesses in London, such as those unprepared to enter commercial mortgages. Now, the go-ahead has been given for construction at the Leadenhall Building, which will have 47 floors.

Last week Land Securities, rival to British Land, announced that the UK''s commercial property market was experiencing a slowdown.

The Leadenhall Building is not expected to be ready until 2011.