Mitsubishi Estate Starts Construction on $1.7B Pair of London Office Projects

Japanese property giant Mitsubishi Estate has begun construction of two wholly owned London office projects with a combined development cost of JPY 248 billion ($1.7 billion).

The projects involve the redevelopment of the former ITV head office and studios on London’s Southbank for JPY 160 billion and the large-scale renovation of Mitsubishi Estate’s already-owned building at 1 Victoria Street in Westminster for JPY 88 billion, the company said Wednesday in a release.

The 1 Victoria Street project, with an expected gross internal area of 65,700 square metres (707,189 square feet), started Wednesday, while the 91,200 square metre Southbank redevelopment, known as 72 Upper Ground, began Thursday. The projects are scheduled to be completed in 2028 and 2029, respectively.

The announcement comes less than a month after Mitsubishi Estate revealed its participation in a planned 8,110 square metre logistics campus in southeast London, with the Tokyo-based group having acquired and developed 24 buildings in Britain and continental Europe since entering the European market in 1985.

“Going forward, in addition to office developments in London, Mitsubishi Estate will continue to actively develop projects that match market characteristics, such as built-to-rent and logistics facility developments in the UK and office developments in continental Europe, to achieve sustainable growth in its international business,” the company said.

Largest Undertaking

Mitsubishi Estate acquired the 1970s-era ITV complex in 2019 and commenced demolition work in January of this year to prepare for the company’s largest-ever London development in terms of project cost.

Located an eight-minute walk from the Waterloo railway/subway station on the Southbank waterfront, 72 Upper Ground’s two buildings are expected to provide 53,400 square metres of leasable office space. Floor plates will range from 900 to 6,000 square metres, with River Thames views and amenities including private terraces.

The development will include the London Studios, a section offering affordable rents on the first basement level through the second floor of the connecting podium levels. The initiative aims to support emerging talent in the cultural and artistic fields by providing dedicated office space.

For 1 Victoria Street near the Houses of Parliament, Mitsubishi Estate is revamping a 10-storey building acquired by the company in 2013. The 1965-vintage property was previously leased to a government tenant that vacated the premises in January 2024.

The plan includes opening up the property to the surrounding neighbourhood by removing fences wrapped around the existing building and creating a “pocket park” on a corner of the site facing Westminster Abbey. The reworked building will offer 34,800 square metres of leasable office space.

Japanese Overseas

Mitsubishi Estate’s latest London projects follow the company’s purchase in late 2023 of an office tower in the city’s posh West End from a joint venture of Savills Investment Management and Korea’s Vestas Investment Management. The Japanese giant teamed up with Dutch developer Edge to buy 125 Shaftesbury Avenue, a former WeWork location, for £150 million ($189 million), per the Estates Gazette.

Across town near the City of London, Australian builder Lendlease in March welcomed two Japanese investors into a $950 million office development overlooking Moorgate station west of Finsbury Circus. Sotetsu Urban Creates and Yasuda Real Estate took a combined 20 percent stake in the 53,000 square metre 21 Moorfields, which is fully let to Deutsche Bank on a 25-year lease.

Also last month, Mitsubishi Estate announced the opening of its A$1.3 billion ($830 million) Parkline Place complex in Sydney. In 2021, Canada’s Oxford Properties and its Australian operating partner Investa brought the Japanese group into a joint venture to develop the 39-storey office building and retail precinct, which features 47,800 square metres of office space and 1,290 square metres of retail.

Osaka-based Daibiru Corp made its own Sydney splash in March, picking up the 27-storey 135 King Street from an Investa-managed fund for around A$600 million.