TO some, it was the best-ever deal in the property market but to London landlords it was a chilling message.
In question was the £100 sweetener British Land gave to its tenant, the European Bank for Reconstruction and Development, to prevent it from moving to Canary Wharf in 2006.
For the next three-and-a-half years from June, the bank will enjoy a rent-free tenancy worth £67mil in the City and without having to reinstate the building to its original form, a saving of £33mil.
The bank would now be spared the job of ripping up its walls of marble installed at a cost of £750,000 by its first chairman when the bank, set up to help ailing East European countries, arrived in London in 1991.
Earlier this month, Great Portland Estates enticed an insurer with a 33-month rent-free period worth more than £7.3mil to stay on as anchor tenant at another City address.
Too much empty space and tumbling rents in the Square Mile and central London have also spread to the housing sector where prices failed to rise last month for the first time in 18 months.
It’s welcome news for many as they can look forward to more affordable rentals after years of robust price increases, but for investors the cooling market may be in for a damaging correction.
For two former maths teachers, the market slowdown will not make much of a dent on their £75mil property business with 465 houses, mainly in two towns in Kent, that are rented out to professionals.
When interest rates fell in February, the husband-and-wife team splashed £6.9mil on houses in Ashford in one afternoon, and word has it that they are still building their empire.
Bricks and mortar win again in this year’s Rich List compiled for The Sunday Times: 150 of the big money are in land and property, followed by 135 in industry and 98 in banking.
The Duke of Westminster again topped the lot with a fortune of £4.9bil, thanks to his huge London land bank in choice Mayfair, Chelsea and Belgravia.
His company set a benchmark last year when a 6ft by 9ft space in a Mayfair underground car park was sold for £65,000.