Investment Markets » Construction and Property
Should We Mourn The Cheesegrater?
The property boom produced a stack of plans for ever more ambitious towers. They are beginning to fall like skittles.
A year into the downturn, the crunch has claimed its most prominent victim yet – a 736ft, Richard Rogers-designed tower on Leadenhall Street known as The Cheesegrater, which would have become (briefly) the City's tallest building.
The developer, British Land, has learnt that what is "location, location, location" in the residential market, translates to "timing, timing timing" for commercial property. It has delayed the project until building costs fall and the decimated office market recovers.
The Cheesegrater is one of a crop of City buildings scheduled for completion before 2012, but in the current climate, it will take a brave developer with very deep pockets to press ahead. Rival Land Securities has also delayed its Walkie-Talkie building, and it comes as little surprise that the three towers still sticking to their original deadlines – the Shard, the Pinnacle and Heron Tower – all have Middle Eastern petrodollars behind them.
British Land should count itself lucky that it could pull the plug before serious construction got under way. Clearing a site for a Cheesegrater is expensive, but not compared to being saddled with an empty hulk – the kiss of death for a building's reputation that makes profitable letting even harder.
There's another reason why British Land's investors should be relieved. In an effort to raise £1bn a year, the Government has imposed an "empty rates" tax on vacant buildings, doubling the payments demanded from landlords and sometimes adding hundreds of thousands to the running cost of a single building.
Scores of property developers now have plans to demolish offices, warehouses and shops, leaving Britain's cities looking like a postwar wasteland.
Skyscrapers are architecture's sunflowers. Given a good, sunny financial climate, they soar into the urban firmament. But their fate is at the mercy of economic swings, and contemporary city skylines can be read as graphs of the ups and downs of the economy.
Many Londoners, including Mayor Boris Johnson, will breathe a sigh of relief at this latest setback. They question the wisdom of building a prominent cluster of skyscrapers so close to St Paul's and the Tower of London. But this pause is more likely to be a semi-colon than a full-stop.
The Square Mile is determined not to lose its lead to upstart rival areas; and, as Canary Wharf grows taller and bulkier, the City feels obliged to follow suit. The recession might be a good time to pause and think about the skyline, but all the indications are that when the sun shines again, the way forward will be, literally and lucratively, upwards.
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