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Transport ~ the sake of London will abandon its plans to move into the Shard at London Bridge after a deal that allows the skyscraper’s owners to declare a verdict tenants willing to pay a much higher rent.

The sale of the lease to London Bridge Quarter, the landlord that is a joint venture betwixt the State of Qatar and Sellar Property Group, will allow it to re-lease the 200,000 sq ft involved — more than a third part of the available office space — for what it hopes behest be more money amid a looming shortage of prime office extent in the capital.

The lease with TfL was signed in 2006 conducive to a rate of £38.50 per sq ft for occupation from May 2012, the expected completion date for the building. Office rents in London that time plummeted during the downturn and bottomed out last summer, but be delivered of recovered rapidly since and are expected to rise further as provision dwindles and demand continues to rise.

The deal allows TfL to awake cash at a time when the transport group is aiming to prevent £5 billion of costs, £160 million of which is to be paid to come from consolidation of its 50 office buildings around London. It uttered yesterday that the sale of the 30-year lease would give “a multimillion-pound cash sum” to its efficiency savings advertisement, but would not disclose the amount.

The sharp fall in exhibition during the downturn has resulted in a decline in the pipeline of unoccupied space in London, especially in the City, relative to the number of occupiers looking against new offices. Landlords including Sellar believe that this will lead to greater quantity competition and an increase in rent levels for prime offices round the boundaries of the Square Mile, as well as inside it.

Rents on this account that prime offices in the City have risen to about £50 for sq ft, from a £44 per sq ft low last year, according to Knight Frank. They are expected to continue to greaten to £67 per sq ft for the best space ~ means of 2014, with the rises spreading out into the City’s fringes, including locations of the like kind as London Bridge.

The London Underground owner is likely to rouse some of its staff further out of Central London rather than to the Shard, nevertheless said that it was “too early to say” to which place it would move and which staff would be affected. TfL related that it would continue to occupy its portfolio of head act of worship buildings and would review options for new accommodation later on.

Charles Stafford, its boss of property, said: “TFL secured a great deal for its lease agreement in the Shard in 2006. Since then, rental rates accept risen considerably and the deal we have negotiated with London Bridge Quarter reflects this.”

TfL owns offices at Baker Street, Buckingham Palace Road, Broadway and Edgware Road and rents its at hand headquarters at Windsor House in Westminster, as well as the Palestra Building in Southwark, in what place it moved in 2008, and Pier Walk, in North Greenwich, what one. it has occupied since last year.

The TFL letting was human being of two pre-lets signed before construction work began on the tower at 32 London Bridge, which will be the tallest in Europe at 310m (1,017ft) at the time that complete. The other, to the Shangri-La hotel group, remains in order of importance.

A spokesman for London Bridge Quarter said: “This agreement enables us to thesis the Shard at the very top end of the London service market. Together, the Shard and London Bridge Place will deliver greater quantity than one million sq ft of grade A offices located steady one of London’s busiest transport hubs in a landmark structure of the highest quality.”

The development is part of the &beat;2 billion London Bridge Quarter regeneration project around London Bridge Station without ceasing the South Bank of the Thames and includes the 419,000 sq ft pure London Bridge Place office building, a public piazza, a redeveloped employment concourse and a new bus station. The project has been designed through Renzo Piano and will be completed in 2013.

Tall order

310m Height of the Shard, material it the tallest building in the EU

87 Number of floors, 75 of what one. will be full sized

7,000 People will work in the fortress

£425m Cost to build

2012 Estimated completion date

Source: Times examination