If skyscrapers are a sign of a city’s virility, London has nothing to worry about. Today will see the inauguration of the Shard, a 310m-high, glass-clad pyramidal tower on the south bank of the Thames that already dominates London’s skyline. But the property establishment has been dismissive of the project. It is designed by an Italian, financed by the Qataris, and run by Irvine Sellar, a former clothes retailer with no history of grandiose developments.
Mr Sellar will be hoping that tenants are more enthusiastic. So far the only confirmed occupant is the Shangri-La hotel, although talks are under way with others. He is hoping to achieve rents on a par with the £55 per sq ft charged in the centre of the City, which is about 40 per cent more than the average for offices in the immediate vicinity, according to data from Jones Lang LaSalle.
He should not hold his breath. Demand for City offices is subdued as nervous companies shy away from expensive moves. And on the supply side the Shard will soon be joined by skyscrapers called the Cheesegrater and the Walkie-Talkie, as well as a wave of refurbishments. Speculative development in the City rose by 28 per cent in the first three months of the year. Ominously for Mr Sellar, the Walbrook, a new office building far closer to the centre of the City than the Shard, is still empty more than two years after completion. The Pinnacle, yet another skyscraper under development, is on hold.