Europe’s tallest skyscraper the Shard opens in London with 26 floors of vacant office space
Europe's tallest skyscraper the Shard was inaugurated in London in a dazzling sound and light show befitting its status as the capital's brashest and most controversial building.
The Shard's inauguration marks the completion of the exterior of the building, located on the south bank of the River Thames at London Bridge, while work on the inside is expected to continue into 2013.
Superstar architect Renzo Piano calls the European Union's new tallest building a vertical city”.
The elongated glass pyramid, built atop a train station in a scruffy neighbourhood near the Thames, will open with 26 floors of vacant office space, and developers have to fill it at a time when rents are at the flattest in at least 50 years.
The Shard's developers are spared from market wrath solely because the building was built with funding by the deep-pocketed royal family of Qatar, rather than a publicly listed firm, said John Cahill, a property analyst at Investec.
With the Shard's office floors still empty, it would be panic stations if it was a listed developer behind it, he said.
Long gone are the days in London's commercial real estate market when the Foster + Partners-designed 30 St Mary Axe, known as the Gherkin because of its oblong shape, opened in the financial district in April 2004 with all floors already rented.
The Shard is just one of several skyscrapers now sprouting across London with nicknames that reflect the silhouettes they cast on the skyline. But with a financial crisis having blown in since architects first came up with designs for the Walkie Talkie and the Cheese Grater, lettings have been muted.
Rents for the best offices in London's financial district - the yardstick used by Shard developer Irvine Sellar for the offices at the bottom of the tower - have been 55 pounds per square foot since September 2010, property consultant CBRE said. That is the longest period of flat rents since its records began in 1960.
The Walkie-Talkie, also known as 20 Fenchurch Street, is being developed by Land Securities and Canary Wharf Group. The Leadenhall tower - the official name of the Cheese Grater - is being funded by British Land and the property arm the Ontario, Canada city workers' retirement fund.
Developers say a wave of lease breaks and expiries over the next several years will prompt tenants to move into well-appointed new offices.
If the climate is bothering the Qatari funders of the Shard, they did not say so at an opening event this week.
Recovering our investment is a minor thing at the moment, said Sheikh Abdullah Bin Saoud Al Thani, governor of Qatar Central Bank.
The development cost of the Shard, a neighbouring office building called The Place and communal areas around London Bridge train station is about 1.5 billion pounds.
We have confidence in the London market and a long relationship with London,” he said, emphasising that a slowdown was part of a normal economic cycle.