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Thu 17 Oct 2019 08:51 AM

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Dubai investment firm said to plan expansion of London landmark

Dubai-based investment company Easa Saleh Al Gurg Group will ask London authorities for permission to expand the IBM building by about 50%, according to sources

Dubai investment firm said to plan expansion of London landmark
International Business Machines Corp has been in the current building for nearly four decades, and talks are under way on a new long-term lease for IBM to occupy about two thirds of the proposed enlarged site.

The owner of the IBM building on London’s river Thames plans to seek approval to remodel and extend the property and lease most of it back to the technology giant.

Dubai-based investment company Easa Saleh Al Gurg Group will ask local authorities for permission to expand the building, a brutalist 1970s landmark, by about 50%, according to people with knowledge of the matter.

International Business Machines Corp has been in the current building for nearly four decades, and talks are under way on a new long-term lease for IBM to occupy about two thirds of the enlarged site, said the people, who asked not to be identified because the plans are private. There’s no certainty that a lease will be signed, the people said.

A representative of Al Gurg declined to comment. Representatives for IBM didn’t immediately reply to emails and telephone calls seeking comment.

Brexit uncertainty

Demand from global technology companies has helped sustain London’s office market in recent years even as Brexit uncertainty heightened fears of a market crash.

Apple Inc. and Facebook have signed leases for major new headquarters since 2016, and Google owner Alphabet Inc. is also in the process of building a new London head office.

Al Gurg is working on the project with developer Stanhope Plc, architecture firm Allford Hall Monaghan Morris and fund manager LaSalle Investment Management, the people said.

Spokesmen for LaSalle and Stanhope declined to comment.

The current IBM building spans about 217,000 square feet (20,160 square meters) and houses about 1,500 staff. The company also rents about 500 desks in a nearby WeWork building as well as other smaller London offices.

Historic

IBM, which is being advised by BNP Paribas SA’s real estate unit, will decamp from its current premises to a temporary home if the plans are approved so work can be carried out, the people said. The building was placed on a local list of historic buildings by Lambeth Council in 2010, meaning any remodelling work will be politically sensitive.

A representative of BNP Paribas declined to comment.

Lambeth council approved a 1.2 million square foot office and retail development adjoining Waterloo railway station late on Tuesday, about 600 feet from the IBM building. The Elizabeth House project, backed by Slovakian developer HB Reavis, is one of several large developments in the Southbank area, which houses several of London’s most popular cultural institutions.

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