Goldman Sachs buys into £500 million ‘Paris-proof’ London Bridge office development

Goldman Sachs is backing a new half a billion pound “Paris-proof” London development as investors bet that demand for eco-friendly offices will jump in the post-pandemic era.

The US investment bank’s asset management business has bought a 75% stake in a new “green office” development near London Bridge. The project is being spearheaded by environmentally friendly developer EDGE and is understood to cost around £500 million.

The new building is due to open in 2025 and will be on St Thomas Street. It will be built at a site currently occupied by a Home Office building, which is due to be demolished in July.

EDGE’s new development aims to use as little carbon and energy as possible in both its development and running. The 400,000 square feet building will use cross laminated timber instead of steel in places to lower the building’s carbon footprint, just one example of how it plans to build green.

The project is aiming to be net carbon neutral and has been developed in line with the 2015 UN Paris Agreement on climate, leading developers to dub it “Paris-proof”.

The building, due for completion in 2025, is a bet that demand for eco-friendly offices will soar in the coming years as climate-conscious companies look for ways to cut their own carbon footprints. Buildings — both commercial and residential — contribute around 40% of the UK’s total carbon footprint, according to the UK Green Building Council.

Chris Semones, a managing director in the real estate business within Goldman Sachs Asset Management, said: “We believe EDGE London Bridge will set a great example in the market and prove attractive to ESG focused tenants and ultimate investors alike, which in turn will drive strong investment performance for Goldman Sachs and our clients.”

The 26-floor building will have 260,000 square feet of office space but will also feature a gym, terrace, a communal club, a 180 seater auditorium, publicly accessible ground floor coffee shop and a public park space around the building.

The high-end amenities reflect a second trend in the office market: demand for space with mod cons that can lure workers back to the office after months of working from home.

After fears that the pandemic would spell the end of the office for good, investors and companies alike are now convinced that it is due a comeback.

Investors put £11 billion into London offices last year, a return to pre-pandemic levels, and 2022 is already off to a strong start with Google striking a $1 billion deal to buy a building off Tottenham Court Road where it already has significant space.