20 Moorgate Pre Let Acquisition – An Industry First

The first ‘off‑plan’ pre‑letting agreed in the City of London

Background

Cazenove & Co, founded in 1823, was one of the City of London’s most respected stockbroking partnerships. Renowned for its discretion, heritage, and deep client relationships, the firm was the last major stockbroker to maintain its partnership structure following the 1986 “Big Bang” reforms.

In 2000, the Partners announced their intention to raise external capital and list the business on the London Stock Exchange. The partnership was dissolved in April 2001, transferring operations to Cazenove Group plc. A subsequent 2004 joint venture with J.P. Morgan (forming J.P. Morgan Cazenove) ultimately provided the mechanism for the bank to acquire the business outright.

The firm’s evolution has been documented in David Kynaston’s authorised history Cazenove & Co – A History, and in former CEO Robert Pickering’s memoir Blue Blood, which offers a personal perspective on leading the organisation through transformational change.

Property Relationship

Nick McCalmont-Woods’ long relationship with Cazenove began in 1984 during his time at JLW. Over the next two decades – at JLW, GVA Grimley, and later through McCalmont-Woods – he acted exclusively for the firm across its London office portfolio.

His work included rent reviews, lease renewals, acquisitions, lease regears, and strategic consultancy (to include offices in Chester, Milan, Paris and Frankfurt). By the late 1990s, his brief expanded significantly with the challenge of securing modern, efficient accommodation capable of supporting the firm’s growth ambitions.

The Challenge

By early 1997, Cazenove occupied approximately 100,000 sq ft across nine interconnected buildings near the Bank of England. These premises were held under separate leases from four different landlords, most of which expired – or could be terminated – in 2003.

The existing arrangement presented material risks:

• Significant capital investment would be required to upgrade the ageing buildings which were no longer fit for purpose.
• There was no certainty the firm could renew all leases on acceptable terms.
• Failure to secure alternative accommodation could lead to business fragmentation and exposure to substantial dilapidations liabilities.

Recognising the strategic implications, Nick prepared a detailed discussion paper for the Board in January 1997, setting out options and a recommended way forward.

Nick McCalmont-Woods was tasked with devising and executing a strategy for Cazenove to acquire a new building of 155,000 sq ft arranged over basement, ground and six upper floors. Terms were agreed with developer MEPC to construct the new building on the site of Northgate House and Kent House in accordance with a detailed design brief incorporating three trading floors, each of 20,000 sq ft.

New 25-year leases (subject to earlier tenant only break options) were agreed from shell & core completion and payment by the landlord of a £16 million tenant inducement and Category A allowance. In addition, the pre-letting concluded by Nick McCalmont-Woods extinguished a potential claim against Cazenove for approximately £10 million reinstatement and dilapidations liabilities on its existing premises.

The transaction is especially notable because it represented the first pre-letting to be agreed “off-plan” in the City of London.

Strategy

Nick’s proposed strategy focused on delivering clarity, flexibility, and long-term operational value. The key elements included:

• Consolidating the firm into a single modern, purpose-built office of approximately 150,000 sq ft in the City core.
• Ensuring that any new building could incorporate three bespoke 20,000 sq ft trading floors to meet evolving operational requirements.
• Running a dual-track approach:
  – identifying a new development site, and
  – simultaneously exploring potential redevelopment of the firm’s existing estate.
• Entering the office market with a clear requirement for new headquarters by 2000–2001.
• Selecting a development partner capable of delivering a bespoke building to Cazenove’s specification.

The Board adopted the recommendations in full.

Outcome

By September 1997 – just nine months after presenting his report – Nick had successfully negotiated terms for a bespoke, build‑to‑suit pre‑let at 20 Moorgate with preferred developer MEPC, working closely with Cazenove to select both the site and the architectural team, Sidell Gibson.

Key features of the transaction included:

• A new 155,000 sq ft building on the site of Northgate House and Kent House, arranged over basement, ground, and six upper floors.
• Completion of various site assembly negotiations. These included securing rights over Copthall Close to close an historic ‘Charter Street’, the acquisition of an existing Headlease over Kent House and securing vacant possession of the Butlers Head Public House which formed part of Kent House and the granting of a new Headlease to MEPC from the Clothworkers’ Company (one of the Great Twelve Livery Companies in the City of London) to enable full redevelopment of the site.
• Cazenove entering into a 25‑year lease structure (with tenant-only breaks) commencing on shell-and-core completion under three separate leases.
• Payment of a £12 million inducement plus a Category A contribution from the landlord.
• Elimination of circa £10 million in potential dilapidations liabilities relating to the firm’s existing premises.

The design of 20 Moorgate also anticipated a Phase 2 expansion into the adjoining Piercy House (now a hotel), although market conditions following the 2001 downturn and the impact of 9/11 meant the additional phase did not proceed.

This transaction was significant because it represented the first ‘off‑plan’ pre‑let ever agreed in the City of London, setting a precedent for future pre-lettings

Nick continued to support Cazenove – and subsequently J.P. Morgan Cazenove – through his move to GVA Grimley, and founding McCalmont-Woods, maintaining a trusted advisory relationship spanning over 30 years.