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£340m Cheesegrater to go-ahead as British Land forms JV with Canadian pension fund

Construction of the £340 million Cheesegrater is set to go-ahead as British Land have formed a 50:50 joint venture with the Ontario Municipal Employees Retirement System.

The construction value of the 224m tower is £340m and will start in early 2011 on the Leadenhall site, in the heart of the City of London. The tender process will start immediately and it is likely firms such as Sir Robert McAlpine and Mace will be interested in the work.

Other firms such as Skanska could also be interested in tendering for the work.

The 47 storey building will provide 57,000 sq m of space and will also include a four storey landscaped public space at the base of the building, covering nearly half an acre.

Practical completion to the shell and core of the building is expected in the second quarter of 2014.

Britsh Land will form the joint venture with Oxford Properties, the real estate arm of the OMERS Worldwide Group.

British Land chief executive Chris Grigg said: “We are delighted to be announcing the development of the Leadenhall Building. With its unique and iconic architecture, it is a building which will provide an unbeatable combination of style, presence, location and office floor space in the heart of the City of London. Our partnership with Oxford Properties, brings together two world-class property companies with proven development and asset management expertise.”

Confirmation that the Cheesegrater will go ahead comes just days after a similar agreement to develop the £350m Walkie Talkie was made between Land Securities and Canary Wharf Group.

High quality office space in the City of London will be in short supply around the time the two developments face completion and this is expected to push up rental values. This potential increase in rents is the driving force behind the development of these two iconic towers.

The final joing venture agreement is subject to contract which is expected to be signed by the end of the year.