Brexit may delay London skyscraper

Axa’s property unit will ask investors whether they want to proceed with the construction of what would be the tallest tower in the City of London now that Britain plans to leave the EU, according to a senior source.

Axa Investment Managers-Real Assets, which is leading the project to build the office property at 22 Bishopsgate, will offer the other investors three alternatives, said the source.

The investors can either stick to a plan to start work on the building this year, delay the project or sell it. The last option is least likely.

Pierre Vaquier, chief executive of the unit, said shortly before the June 23 Brexit referendum that the company would wait for the outcome before deciding whether to construct the 62-storey office tower.

The UK commercial property market entered a recession in July, according to MSCI, with the value of central London offices falling 3.6%.

“We remain committed to the site, we are continuing to work and we are considering all our options,” Richard Sunderland, a spokesman for Axa Investment Managers-Real Assets, said.

Axa’s co-investors in the project include Singapore’s Temasek Holdings, Canada’s Public Sector Pension Investment Board and British Columbia Investment Management.

The Paris-based company last year bought the site of the halted Pinnacle skyscraper, saying it would build a 278m tower with 130,000sq meters of offices, shops and restaurants.

The previous owners stopped construction on the Pinnacle in 2012.

The tower at Bishopsgate is the tallest building in the City of London to have been approved by planners. The main construction contract could be signed as soon as October if investors choose to proceed, the person said.

Meanwhile, Denmark’s government suggested that Britain shouldn’t be allowed to stop paying toward EU projects that were started while it was a member, as governments position themselves ahead of talks on how to extract the UK from the 28-nation bloc.

“These are huge negotiations that need to take place. It’s not just as if everything can continue, minus Britain,” Danish finance minister Claus Hjort Frederiksen said in an interview.

The notion of making Britain pay for continued relations with the EU is gaining traction in the bloc, with an ally of German chancellor Angela Merkel this week saying the UK won’t be granted access to the single market unless it contributes to the EU’s budget.

The UK paid about £13bn (€15.2bn) to the EU budget in 2015 though it received about £4.5bn from the EU for its own projects. 


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