Shieldpoint seeks Fenchurch exit

James Buckley

A 250,000 sq ft development site in the City core is quietly being offered for sale by its Irish owner, Shieldpoint.

The firm, whose investors include John Flynn and Eugene Larkin, has approached a number of parties about the site at 78-87 Fenchurch Street, EC3.

The acquisition of the land that makes up the development opportunity was backed by Ireland's nationalised bank Allied Irish. It has consent for a 10-storey Foster & Partners-designed office scheme and is expected to fetch around £20m.

Land Securities, which is poised to start work on its 639,000 sq ft Walkie Talkie development at nearby 20 Fenchurch Street, is known to have considered the opportunity. However, sources said that the REIT withdrew its interest because of concerns over the deliverability and timing of the scheme.

Rights of light issues are also understood to be a deterrent.

Robert Buchele, a director at City agent Gresham Down, said: "Delivery into the 2012-14 window is crucial for most investors. It's not just about having planning consent. Rights of light, archaeology, party wall agreements, etc, all need to be in place for a developer to get on site at an early stage.

"We expect a small number of prime sites which are 'oven ready' for development to comfortably­ exceed a site value of £200 per sq ft."

The site is close to another major City development project that has been stalled by the downturn but is now showing signs of movement.

Mark Morris's and Maurice Golker's Investream, which is in talks to refinance more than £150m of debt, is working on new plans to redevelop five City office buildings it owns on Fenchurch Street, Leadenhall Street and Billiter Street.

The investor has regeared insurance firm Markel's 70,000 sq ft lease at 49 Leadenhall Street, EC3, for a further four years, giving it time to work up plans for a 1.25m sq ft office development. Markel's lease was scheduled to expire in 2011.

GM Real Estate is advising Investream; King Sturge acts for Markel.