Thames Court

London, United Kingdom

Project Type: Commercial/Industrial

Case No: C031020

Year: 2001

SUMMARY Thames Court is a 322,800-square-foot (30,000-square-meter) office building that was the first big speculative development in London after the 1980s real estate decline. It also was the first to take a chance on building deep, uninterrupted floor plates, which have been useful for accommodating dealing-floor operations of two large, international financial services companies. As planned, the five-story above-ground building had the potential to be out of place in bulk and scale within its locale, but the completed structure is carefully scaled and articulated to contribute to the Thames riverfront.

FEATURES

The large floor plate building was successfully designed and articulated not to overshadow the small-scale character of the neighborhood. Thames Court features several environmentally friendly elements such as motorized shading devices, an interactive roof light shading system, and windows that open. The project makes generous use of glass on the facade and within the building, including glass floors, with artist-designed etchings, that allow visitors upon entry to get a sense of the character and layout of the building as well as provide light and transparency. The fast-track construction process paid special attention to relationships with the contractors and involved them directly in the building, taking advantage of contractors’ expertise and avoiding duplicate and redundant design work, saving approximately 12 months on the construction time. Thames Court

London, United Kingdom

Project Type: Commercial/Industrial

Subcategory: Office Buildings

Volume 31 Number 20

October-December 2001

Case Number: C031020

PROJECT TYPE

Thames Court is a 322,800-square-foot (30,000-square-meter) office building that was the first big speculative development in London after the 1980s real estate decline. It also was the first to take a chance on building deep, uninterrupted floor plates, which have been useful for accommodating dealing-floor operations of two large, international financial services companies. As planned, the five-story above-ground building had the potential to be out of place in bulk and scale within its locale, but the completed structure is carefully scaled and articulated to contribute to the Thames riverfront.

SPECIAL FEATURES

The large floor plate building was successfully designed and articulated not to overshadow the small-scale character of the neighborhood. Thames Court features several environmentally friendly elements such as motorized shading devices, an interactive roof light shading system, and windows that open. The project makes generous use of glass on the facade and within the building, including glass floors, with artist-designed etchings, that allow visitors upon entry to get a sense of the character and layout of the building as well as provide light and transparency. The fast-track construction process paid special attention to relationships with the contractors and involved them directly in the building, taking advantage of contractors’ expertise and avoiding duplicate and redundant design work, saving approximately 12 months on the construction time.

OWNER

Deutsche Immobilien Fonds (DIFA) Caffamacherreihe 8 20355 Hamburg, Germany 0049-40-3049019-178 fax 0049-40-3491919-297 www.difa.de

DEVELOPER

Markborough Properties Limited c/o Tishman Speyer Properties Millbank Tower, 21-24 Millbank London SW1P 4QP, U.K. 0044-20-7333-2436 fax 0044-20-7333-2501 www.tishmanspeyer.com

ARCHITECT

Kohn Pedersen Fox Associates (International), PA 13 Langley Street London WC2H 9JG, U.K. 0044-20-7836-6668 fax 0044-20-7497-1175 www.kpf.com

PROJECT MANAGER

MACE Atelier House 64 Pratt Street London NW1 0LF, U.K. 0044-20-7554-8000 fax 0044-20-7554-8111 www.mace.co.uk

STRUCTURAL ENGINEER

Waterman Partnership Holdings, PLC Versailles Court 3 Paris Garden London SE1 8ND, U.K. 0044-20-7928-7888 fax 0044-20-7928-3033 www.waterman-group.co.uk

MECHANICAL ENGINEER

Flack+Kurtz (UK) 6 Hanover Street London W1R 9HH, U.K. 0044-20-7409-7565 fax 0044-20-7499-1477 www.flackandkurtz.com SITE DESCRIPTION

The Thames Court office building occupies a prominent site in the City of London fronting the northern bank of the River Thames—just across the river from the new and highly acclaimed Tate Modern. This “tight site”—measuring just 328 by 148 feet (100 by 45 meters)—is on a stretch along the river known as Queenhithe, a medieval quay, and was characterized, at the time planning for the development started, by a lower-scale, smaller-mass environment of chiefly industrial and warehouse buildings dating from the 1800s. The site had been owned since the early 1900s by the Thomson family of Canada, which through its Hudson Bay Company, was the world’s leading fur-trading operation. With its major market in Great Britain, the company established a docking facility on the site, adjacent to its auction facility. When the fur market turned dormant in the politically correct 1980s, the Thomson family, through its real estate development subsidiary, Markborough Properties Limited, began to search for ways to capitalize on this underutilized property.

DEVELOPMENT PROCESS

Markborough Properties determined that a market existed for large floor plate office space, which the City of London had none of owing to a lack of suitably large sites caused by its medieval layout. The site was home to a tired 1970s warehouse for fur traders and a collection of small Victorian warehouses of varying quality, all of which stood empty. The area had been an early and middle Saxon landing place where King Alfred launched the very first boat of the Royal Navy and thus was rich archaeologically, a situation that ultimately would affect the length and cost of the development process.

In any major city, razing a building is often fraught with controversy, especially if there is any historical significance inherent in the building or its site, and the City of London was particularly sensitive about such demolitions. The large warehouse on site was not beloved nor was it old enough to be significant, so clearing that part of the site was not complicated. However, while clearance was underway, English Heritage, a major government agency responsible for protecting historic buildings, landscapes, and archaeological sites—the British counterpart of, and precursor to, the American National Register of Historical Places—“spot-listed” one of the remaining Victorian buildings, giving it a Grade II listing.

Thus the architects were forced to prepare some designs that incorporated the existing building, which covered about 5 percent of the site. However, the small size of the remaining building and its location on the site disrupted the plans for creating a large regular floor plate. After appealing to the City of London and to English Heritage, the architects were allowed ultimately to demolish the spot-listed building if English Heritage judged the replacement building to be of very high architectural merit and a contribution to the civic realm. The appeal and approval process demanded intensive and regular presentations to the City of London planners, English Heritage, and the Royal Fine Arts Commission with multiple designs offered, but it ultimately was successful for the developer. The developer was assisted by the success of the nearby Canary Wharf mixed-use development, which also replaced historic, but architecturally insignificant buildings, with modern buildings of bold architectural design.

Before construction could begin in earnest, the Museum of London Archaeology Service carried out a dig over three-fourths of the site (leaving the remaining one-fourth of the site untouched for future generations of archaeological technicians to apply new exploration techniques). The archaeological work was able to be completed in a surprisingly short 12 weeks, in part because of a spurt of good weather and also because the developer and the architect accommodated their work and offered support for it, so much so that the Museum of London Archaeology Service officially acknowledged the developer’s fine “heritage management.”

The developer contributed several public spaces to the City of London, including widening the river walkway and building a public footbridge across the busy two-way Upper Thames Street to provide better access from the city to the river walkway. In addition, the developer was required to provide retail space on the entrance level.

FINANCING

The site was owned by the Thomson family of Canada, and development was started by one of its subsidiaries, Markborough Properties. When Thomson’s chief executive officer changed, the company announced its intention to withdraw from the European real estate market. The London team at Markborough, however, was determined to go ahead with the project and secured funding.

Getting financing was difficult, but it eventually was secured on conventional terms with Deutsche Immobilien Fonds (DIFA), a German open-ended real estate property fund, making DIFA a partner in the development venture. Thus, DIFA participated in the design and development process and required several additional environmentally friendly elements to be incorporated. For example, halfway through the project, the architects were required to change the mechanical plant system from electric to gas, making it more energy efficient. DIFA also added mechanized window shading.

The cost per square foot was lower than the average cost of a London project, including the additional costs incurred by the archaeological dig, the complications experienced by the site's proximity to the Thames, and the cost of constructing a pedestrian bridge.

DESIGN AND CONSTRUCTION Thames Court makes resourceful use of a limited site. The height of the theoretical building envelope was limited because of its proximity to St. Paul’s Cathedral and the attendant requirement to preserve its views; the site itself was constrained by existing buildings on two sides, the road on one, and the river on another. Therefore, in order to maximize the use of land and to gain extra office space, the design cantilevers over the river. The first floor in particular has a large, column-free central area as well as a one-foot (30-centimeter) raised floor zone, designed to accommodate the higher densities associated with dealing operations and the necessity for flexibility in under-floor cabling. The floor plates also are designed to provide views of the Thames; thus secondary core elements and on-floor mechanical plant rooms have been located against the blank side wall.

Glass is used in abundance, providing an airiness throughout the building. Laminated glass is used throughout Thames Court—in the roof lights, the floor-to-ceiling glazed external walls, as balustrades throughout the public areas, and as floors in the elevator lobbies at the heart of the building. The 1.875-inch-thick (48-millimeter-thick) laminated glass floors on four levels, with both surfaces acid etched and ground down to a design by artists Ben Langlands and Nikki Bell, have a wide variety of surfaces and textures, some embossed or debossed, some opaque or clear. Throughout the four floors, the three-letter codes that are used to identify airports are embossed or debossed on the glass surfaces, with each floor featuring one financial market city prominently in the design (e.g., the first floor features LHR [Heathrow], second floor JFK, third floor TYO [Tokyo], and fourth floor HKG [Hong Kong]).

The building’s primary cladding system consists of a high-quality custom design, prefinished metal, and glass construction with clear insulated glazing. Fully operable windows are found along the exterior elevations and into the atrium providing the building user with a high degree of individual climate control.

Window coverings throughout the building play an important role in keeping the workplace comfortable. The south facade has motorized shading devices that allow full protection to the glass; the west facade’s horizontal motorized louvers protect the glazed surfaces from low sun; and the top floor has external blinds throughout the perimeter. The roof supports an innovative fabric roof light shading device, specially designed by the architects for this building, which allows variations in light throughout the day as well as the seasons. Motorized roller shades fully retract when there is no sunlight or fully extend, with either one or two layers of fabric, when there is too much glare or low sun. During high sun conditions, a motorized paddle rotates to block the sunlight, reflecting light down into the space. The motorized solar shading system is computer linked to two weather-monitoring stations on the site.

Thames Court features six different British stones noted for their warm hues. Much of the stone is used to form external parapet lines and to separate the panelized glass and metal surfaces from each other.

Construction was managed by MACE, which used a fast-track construction management formula from the United States, which ultimately saved approximately 12 months compared with the standard approach used in the United Kingdom. The approach, which takes advantage of trade contractor expertise, reduced duplicate and redundant design work. In general, the developer and the architect were intent on working closely with the trade contractors and making them part of the team. Thus before work began, the architect made a presentation to all the tradesmen down to the foreman level to help them understand the ideas behind the design, and the intention and goals of the work.

At the end of the project, the construction company hosted a full review and “lessons learned” seminar to share triumphs and pitfalls for the benefit of future projects.

Construction was carried on in part from the river side of the site. For example, a barge was used as a staging area, and held a supplemental generator during construction.

Thames Court was ultimately the product of many international influences—American and British architects, Canadian clients, German funders, and Dutch and American tenants. Its character is the result of the creative combination of these influences.

The project has won several awards for design and construction, including the ULI Award for Excellence in 2001, First Place for National Urban Workplace (1999) from the British Council for Offices, which deemed it a “highly legible building, horizontally and vertically”; a Civic Trust Award commendation; and a Structural Steel Award for creative and efficient use of steel.

TENANTS

What was begun as a spec office building was completely leased early on in the construction process, with relatively little marketing. Construction started in June 1996; by September 1997, two tenants wanted the entire building. Instead, the two current tenants—RaboBank and JP Morgan—split the 322,800-square-foot (30,000-square-meter) GLA between themselves. The prime space in the building set a then-record lease rate of £40 per square foot (£431 per square meter). The market had begun crawling out of its dark hole and the floor plate type, new to the London market, was attractive.

The parking garage in the lower level has a total of only 24 secure spaces and is accessed from Kennet Wharf Lane via dedicated car lift. The City of London has an antiparking policy, allowing only one space per 12,000 square feet (1,115 square meters).

EXPERIENCE GAINED The development team underestimated the impact of changing plant systems (from electric to gas) midstream. The change came about because of the financing that came from Germany. The agreed-upon tenant access date was January 2, but the holiday season made it very difficult to meet deadlines, particularly with the additional time needed to make the mid-course changes. Finding a balance between efficiency and a too-tight fit, necessitating that every service area be used up to the last square inch, takes a lot of effort. In subsequent projects, the designers have created a slightly looser fit and therefore installations have been far faster, achieving the same overall building efficiency. The British structural floor recommendations allow very “live” or bouncy floors, but the project engineers recommended stiffer floors than standards based on the proposed use of the building. This turned out to be fortuitous, as Thames Court was the first all-flat screen dealer floor in London and these screens are much lighter and thus more prone to vibrations. A springier floor would not have accommodated these light screens as well. The procurement of building elements involved many different countries and currencies: The elevators are German, the cladding Swiss, the glass Dutch, the mechanical plant American, the atrium Belgian, and the steel, concrete, and stone are British. The developer, backed by the international currency-trading resources of its equity partner, DIFA, chose to purchase all of the materials in the currency of the manufacturer or designer, which ultimately worked to the developer’s advantage but is not without its risks. PROJECT DATA £1 = $1.55 (approximate exchange rate at start of construction)

LAND USE INFORMATION Site area (acres/hectares): 1.04/0.42 Parking spaces: 24 Gross building area (GBA) (square feet/square meters): 320,000/29,728 Net rentable area (NRA) (square feet/square meters): 258,000/23,968 Typical floor area (square feet/square meters): 38,750/3,600 Floor/area ratio: 0.79 Building height: 7 stories, including basement, lower ground, ground, floors 1-4, and mechanical penthouse

LAND USE PLAN Use Acres (Hectares) Percentage of Site Buildings 0.90 (0.36) 87 Paved areas 0.14 (0.06) 13 Landscaping/open space 0 N/A Total 1.04 (0.42) 100

OFFICE INFORMATION Percentage of NRA occupied: 100 Annual rents (per square foot/per square meter): Approximately £40/£431 Approximately $62/$668 Average length of lease: 25 years Typical terms of lease: Upward-only rent reviews every 5 years Average tenant size (square feet/square meters): 135,000/12,412 Largest tenant size: 2 similarly-sized tenants share building

DEVELOPMENT COST INFORMATION Site Acquisition Cost Site valuation (based on appraisal) N/A N/A Additional parcel acquisition cost £8,000,000 $12,400,000 Total £8,000,000 $12,400,000

Site Improvement Costs Excavation £614,978 $953,216 Sewer/water/drainage 115,000 178,250 Paving 345,000 534,750 Water supply 25,624 39,717 Gas supply 10,428 16,163 Footbridge 307,500 476,625 Total £1,418,528 $2,198,721

Building Construction Costs Superstructure £24,104,795 $37,362,432 HVAC 685,000 1,061,750 Electrical 1,804,427 2,796,862 Plumbing/sprinklers 1,695,000 2,627,250 Elevators 1,029,718 1,596,063 Fees and general conditions 4,211,348 6,527,589 Finishes 5,309,000 8,228,950 Total £38,839,288 $60,200,896

Soft Costs All soft costs excluding construction interest £3,650,000 $5,657,500 Construction interest and fees 929,667 1,440,984 Total £4,579,667 $7,098,484

Total development costs (not including £65,000,000 $100,750,000 original site acquisition) Construction cost (per net square foot/per £250/£2,691 $388/$4,171 net square meter) ANNUAL OPERATING EXPENSES Service charge (per square foot/per square £7/£75 $11/$116 meter) Taxes (per square foot/per square meter) £15/£161 $23/$250

DEVELOPMENT SCHEDULE Site purchased: N/A Planning started: January 1995 Leasing started: June 1996 Construction started: June 1996 Tenant access: January 1998 Project completed: January 1998

DIRECTIONS

From Heathrow Airport: Depart from airport eastward on M4. After Piccadilly Circus, turn right (south) onto Haymarket. At the end of Haymarket (three blocks), bear left onto Cockspur Street. At the end of Cockspur (two blocks) at Trafalgar Square, it becomes Northumberland Avenue (three blocks). Turn left at the Victoria Embankment. After Embankment turns into Upper Thames Street, turn right onto Queenhithe Street.

Driving time: approximately 45 minutes in non–peak hour traffic.

Nearest subway station: Mansion House (Circle/yellow line and District/green line).

Gayle Berens, report author David Takesuye, co-editor, Development Case Studies David James Rose, copy editor Joanne Nanez, online production manager

This Development Case Study is intended as a resource for subscribers in improving the quality of future projects. Data contained herein were made available by the project's development team and constitute a report on, not an endorsement of, the project by ULI-the Urban Land Institute.

Copyright © 2001 by ULI-the Urban Land Institute 1025 Thomas Jefferson Street, N.W., Suite 500 West, Washington D.C. 20007-5201 Thames Court's height was restricted by the City of London's requirement that new construction not impede views of the River Thames from the dome of St. paul's Cathedral, which can be seen half a mile away. This upriver view shows the walkway along the river that the developer contributed for public use. In order to achieve the large floor plate necessary to house the trading floor operations of investment banking firms, the designer cantilevered the upper floors over the river walkway and, in some areas, over the river itself. The atrium opens the trading floor to view, and provides natural daylight to the building interior. The fabric paddles of the shading mechanism at the atrium ceiling both rotate and retract silently, and are continuously controlled by sensing monitors that optimize daylight and heat for the comfort of the building's users. The trading floor features open spaces with raised floors, which flexibly accommodate the mechanical, power, and telecommunications needs of technology-based international finance companies. Thames Court's riverfront site was once a medieval quay, within view of St. paul's Cathedral. Southwark Bridge is downriver from the site. In these two floor plans, the slightly curved facade at the left faces Upper Thames Street, and at the right, to the south, the short end of the building faces the river. The ground floor plan shows access to the developer-built pedestrian bridge that crosses Upper Thames Street.