Aon to lease 10 floors of British Land's skyscraper

British Land has announced Aon will occupy 10 floors of the Cheesegrater skyscraper as it revealed an increase in second quarter earnings.

The insurance broker will take up the lower section of the Leadenhall Building, dubbed the Cheesegrater because of its distinctive shape, when the property opens in the City of London in mid-2014. Aon will lease a total of 191,000 sq ft in the tower, taking up roughly a third of the property.

The announcement of the lease came as real estate investment trust British Land posted a rise in second quarter earnings before items of 6.5 per cent after it leased more space to retailers at higher rents and made acquisitions. Profit excluding one-time items and changes in asset values rose to £66m in the three months to the end of September, up from £62m a year earlier.

British Land chief executive officer Chris Grigg said the London-based company plans to add 2.2 million sq ft of office space through 2014 in the heart of the capital. A shortage of Grade A office space is driving up rents in central London.

The deal with Aon means that more than half of British Land’s £1.1bn London office development programme has now been pre-sold or pre-let ahead of completion at the end of 2012 and 2014.

Grigg said: “This significant letting to a leading global business is good news for the City and demonstrates the success of our commitment to creating well located world class buildings that provide long term value to occupiers. I am very pleased to welcome Aon to the Leadenhall Building and continuing our well established relationship with them.”

The 736ft high Cheesegrater building is being constructed in London’s insurance market, opposite Lloyd’s of London. Construction is now underway.

Aon CEO Robert Brown said, “We are delighted to have chosen the Leadenhall Building as our new London headquarters. The Aon Centre at the Leadenhall Building places us at the heart of the City’s insurance sector and the building’s impressive location and offices reflect our standing as the leading global professional services firm focused on risk and human capital management.”

British Land has made £332m of acquisitions since the end of March, including refurbished properties in the City of London financial district and 17 Virgin Active sports centres. Its net debt increased to £4.84bn from £4.59bn in the previous quarter, with its debt now representing 45 per cent of the value of its real estate.