Obayashi-Sellar JV tests water for new City of London tower

60 Gracechurch Street where previous owner KGAL looked at prospects of 30-plus storeys [Image:KGAL GmbH & Co]

Obayashi Properties UK and investment and development company Sellar have begun a public consultation process for their proposals to develop a landmark commercial building at 60 Gracechurch Street in the City of London.

The partners intend to start redevelopment, subject to securing a satisfactory planning consent, once vacant possession is secured in 2026.

The building is located on the western boundary of the ‘City Cluster’ of tall buildings within the Square Mile’s financial district, within a few minutes’ walk of Bank, Monument and Cannon Street stations as well as the Bank of England and Lloyds of London.

Danish architectural practice 3XN, whose projects include the award-winning Quay Quarter Tower in Sydney and 2 Finsbury Avenue at Broadgate, has been appointed to lead the design of the scheme.

No details of the intended size or shape of the project have yet been revealed. However, before Obayashi acquired the present 11,825 sq m building in March 2023, vendor KGAL Investment Management’s asset management team had undertaken a feasibility study for a high-rise development of more than 30 storeys, prepared by architect PLP. The study was intended to demonstrate to potential buyers the scope for substantially increasing the floor area.

The current building was developed in 1997 and extensively modernised in 2010 before KGAL acquired it for one of its closed-end real estate funds.

Obayashi Properties UK, a wholly owned subsidiary of Tokyo-listed Obayashi Corporation, also owns Bracken House on Cannon Street and has a majority stake in 20 Gracechurch Street.

As well as achieving renown through the development of the iconic Thamesside building The Shard, Sellar is currently involved in Seal House, 300 metres from 60 Gracechurch Street, and recently completed a landmark office at Paddington Square.

Bruce McAra of Obayashi Properties UK, said: “Having recently completed a full refurbishment of Bracken House in 2019, we are pleased to continue our investment in particularly in the City with the development of 60 Gracechurch Street. Working with Sellar we have assembled a world class team to deliver our aspiration for an exemplar commercial building that contributes to the evolving ‘City Cluster’.”