Make's £400m Gotham City tower is paused amid Brexit uncertainty

The developer behind Make’s £400 million Gotham City project has decided not to progress the scheme speculatively in the wake of the EU referendum result.

TH Real Estate said the 85,000sq m office project in the City of London - properly known as 40 Leadenhall - would now only progress “subject to the pre-letting of sufficient space to support our business plan”. But the developer added: “Sentiment remains to progress the scheme.”

Make anounced yesterday it was shedding 10 jobs because of Brexit uncertainty. Sheppard Robson is also making redundancies, in a week that has seen a number of property funds suspend trading and the construction industry turn in its weakest performance for seven years.

Gotham City is among a number of private and public jobs thrown into question after the Leave vote, including a John McAslan & Partners office and one by MSMR.

Others include two towers by PLP, 22 Bishopsgate and 150 Bishopsgate. The former is the replacement for the Pinnacle, which fell victim to the last recession. It was dubbed The Stump after work stalled at nine storeys.

When he approved the new design in December, then mayor Boris Johnson said: “After lying abandoned for four years, 22 Bishopsgate will now get off the ground, providing much-needed office space for thousands of city workers and a positive addition to the world-class architecture of the capital’s skyline.”

Axa said it was “committed” to the 62-storey office tower but admitted it was “considering its options” for the scheme following the referendum result.

Brexit also casts further doubt on PLP’s 150 Bishopsgate hotel tower - aka Four Seasons at Heron Plaza - which was already on hold before the vote while Singaporean developer UOL Group reviews its procurement strategy.

The Crown Estate admitted it was reviewing two central London developments – Morley House on Regent Street, designed by MSMR, and the John McAslan & Partners-designed Duke’s Court office block in St James’s which only got planning last month.

Developers and construction firms exposed to London’s commercial sector are starting to count the cost of Brexit, with pipelines under review and investors starting to pull funding.

Investors also started to cool on commercial property this week, with Standard Life, Aviva and M&G Real Estate all suspending trading on their multi-billion pound UK property funds after a rush of withdrawals from investors.

One of Singapore’s largest lenders, the United Overseas Bank, also suspended its loan programme for London properties last Friday.

The wider turmoil prompted Bank of England governor Mark Carney to reassure investors on Tuesday that he was ready to pump money into the economy, including an extra £150 billion of lending, as he warned Brexit risks were starting to “crystallise”.

In London, industry experts told BD’s sister magazine, Building, that commercial clients were reviewing their pipelines post-Brexit and office developers were more likely to seek pre-lets rather than starting schemes speculatively.

However, in better news, BD understands Balfour Beatty began negotiations this week with Wanda One, the Chinese developer behind KPF’s One Nine Elms twin-tower development, about the main contractor role.

Tony Giddings, a former Argent director who helped mastermind the regeneration of King’s Cross in north London, told Building, in an interview to be published next week: “A lot of people are waiting to see how things go with the dollar and the pound at the moment.

“A weak pound might attract investment in - but I do think generally that new developments which haven’t got pre-lets are going to think twice about moving on commercially.”