In a bold move that defies post-pandemic scepticism, M&G’s With-Profits fund has demonstrated unwavering confidence in the commercial property sector with its £900 million investment in 40 Leadenhall Street, a prestigious 42-storey tower in London’s financial district.
Chief Investment Officer Ciaran Mulligan, who authorised the substantial investment just months before the global pandemic, remains steadfast in his conviction. The 44-year-old executive’s decision to proceed with the development has been validated by strong tenant demand, with the building achieving 85% occupancy before completion.
The towering structure, now the City’s third-largest office building, exemplifies the evolving demands of modern workplaces. Featuring spa-like facilities, steam rooms, a fitness studio, and a cinema complete with a popcorn machine, the development caters to companies seeking premium space to entice employees back to office-based working.
US law firm Kirkland & Ellis has emerged as the anchor tenant, securing 20 floors at an estimated annual rent of £25 million. The building’s design accommodates up to 8,000 workers, reflecting a broader trend where organisations are allocating more space per employee to enhance workplace experience.
Market data supports M&G’s strategic investment, with Land Securities reporting that typical occupiers now demand 25% additional space per staff member. This shift towards larger, more amenity-rich environments suggests a transformation in office utilisation rather than its decline.
Mulligan’s perspective on the future remains optimistic: “Offices will always have a place in our portfolio simply because people will always want a place to come to collaborate and to work.” The success of 40 Leadenhall Street appears to validate this vision, demonstrating that premium office spaces continue to attract substantial tenant interest despite hybrid working patterns.
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