April 3, 2014 / 2:00 PM / in 4 years

UK financial watchdog becomes first Olympic Park office tenant

LONDON, April 3 (Reuters) - Britain’s financial watchdog will move its headquarters to London’s former Olympic Park, making it the first office tenant in a 2 billion pound ($3.3 billion) scheme the government hopes will become the city’s third business district.

The government and developers of the former Olympics site in Stratford, east London, are anxious to avoid the problems many other hosts such as Greece and China have faced in finding long-term occupiers for districts they developed for the games.

Billions of pounds were invested to transform the Stratford area, once better known for its noxious factories and slaughterhouses, to host the London Olympics in 2012. It is now home to Europe’s largest urban mall, Westfield Stratford, and thousands of new homes are set to be built there.

The Financial Conduct Authority (FCA) will move its 3,000 staff from the Canary Wharf district into a 425,000 square foot office block in the International Quarter site, which will be built by Australian developer Lend Lease and government-backed firm London & Continental Railways (LCR).

It will be the first commercial building for the International Quarter, a 2 billion pound scheme in the vast Olympic Park which will contain 4 million square feet of commercial space, 350 new homes and a hotel when finished. The FCA’s offices will be completed in 2017.

“The development heralds a new generation of offices in London which will have a similarly transformative impact to the development of Canary Wharf more than twenty years ago,” Lend Lease Europe’s Chief Executive Dan Labbad said.

Lend Lease and LCR said they were in talks with a number of other major organisations about renting space in the scheme.

In comparison with London’s traditional City financial district and Canary Wharf, where firms can expect to pay office rents of between 65-70 pounds per square foot and 40-45 pounds per square foot respectively, Stratford rents could be as low as 25 pounds per square foot, said Mat Oakley, director of commercial research at property consultancy Savills.

“The cynic in me would say that the first major letting was always going to be public sector or quasi-public sector. There’s huge vested interest in ensuring the legacy is a success,” he said. “But because of Westfield Stratford it already has critical mass as a potential office location.”

$1 = 0.6012 British Pounds Reporting by Brenda Goh; Editing by Mark Potter

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