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Brookfield takes expanded role on revamped Pinnacle
Contractor Brookfield Multiplex has secured an expanded management role on the stalled Pinnacle tower development. The news comes as revamped designs for the tower are set to be launched which are expected to propose a partial change of use from commercial to residential.
Building understands that Brookfield Multiplex has taken on a “hybrid” contractor and project management role on the City tower (pictured), beyond its £593m job as main contractor, and has been working with architect Kohn Pederson Fox and the client to value engineer the designs in a bid to significantly reduce the project’s costs. Under current plans the cost could reach £1bn.
It is understood the new plans are aimed at simplifying the 288m-tall helter-skelter form to make the unusual shape more viable for office use. However, it is also understood that the relaunched scheme is set to include a partial change of use from commercial to residential in a bid to boost its viability. This move is likely to prove controversial with City of London planners, who have long opposed residential use in the City and have expressed concerns about the potential distortion of the City’s commercial development by the influx of foreign wealth into London’s residential market.
Peter Rees, City of London planning officer, told Building: “Were they to seek alternative use of significant parts of the building, it would be unlikely to be accepted from a planning point of view in London’s central business district, where we’re short of office space.”
The Pinnacle has lain dormant since the beginning of 2012 after finance for the scheme dried up.
A £16m legal row over unpaid fees between Brookfield and the client, Pinnacle No 1 Ltd - a joint-venture between Sedco, a Saudi Arabian fund manager, and a Sharia-compliant fund managed by Pramerica - was settled in January, removing the imminent threat of insolvency from the stalled project.
It is understood that Brookfield’s expanded role on the scheme was secured as part of that settlement, with the firm likely to earn higher fees if the project is built out, to compensate for the £16m it had claimed it was owed.
However, the project still lacks the anchor tenant the client has said it needs to enable it to proceed. Until a tenant or a fresh financing package can be secured the project is likely to remain on hold.
A Brookfield Multiplex spokesperson declined to comment on the exact detail of the firm’s role or the fresh design proposals, but said: “We are working with the client on a development appraisal to move the scheme forward.”
Kohn Pederson Fox and Pinnacle No 1 declined to comment.
The Pinnacle, partly built and planned as the tallest skyscraper in London, is presently known as "The Stump", since only seven of it's 63 storeys have been built, could be knocked down and rebuilt.
The architects, Kohn Pedersen Fox have completed a redesign of the Pinnacle, to reduce the cost of it's construction, originally estimated at around £1 billion, thanks to the use of expensive curved windows in particular, which were each of a different size.
The original design would make it more than twice as expensive to build as the Shard, which cost around £450 million and would increase the risk that the building might not be profitable.
The new designs have similar massing, but will require planning consent. City planning officer Peter Rees said: "The Pinnacle, or Helter-Skelter as I prefer to call it, was one of the last of the era of wacky buildings." Rees has been involved in discussions about alternative designs, and expects to see proposals which are more commercially sensible in terms of floor plates, where curves produce too much dead space.
Back in February, a resolution to the buildings other legal and financing issues, which had halted construction in January 2012, was announced. The financing issues had been caused by the legal dispute over unpaid fees to Brookfield, which made prospective tenants think twice about signing the pre-lets which make the scheme viable.
In a statement then Arab Investments said: "The Pinnacle No 1 Limited announces that it has secured finance to continue the Pinnacle project over the next two years including a further annual extension of the HSH Nordbank loan.
"It has also reached agreement with Brookfield Multiplex, which will allow the two companies to continue to work on the project going forward. The Pinnacle No 1 Limited will initiate a review of the scheme with Brookfield and will make a further statement following the completion of this review."
As a result of the settlement Bookfield Multiplex is taking on an expanded role as co-developer as well as main contractor. Whether the building that is eventually built will be a "Pinnacle" remains to be seen.
Last edited by towerpower123; May 2nd, 2013 at 03:27 AM.
Reason: new article