Aviva completes Mayfair office rehab with Sona pre-let

Aviva Investors has finished Pegasus Mayfair, IREI reports, the heritage-led office redevelopment at the corner of Piccadilly and Sackville Street. The offices total roughly 60,000 square feet. They occupy six floors. Six apartments sit above. At street level, nearly 14,000 square feet of commercial space includes a retail parade facing Piccadilly and a restaurant on Sackville Street.

More than half the office space is spoken for. Sona Asset Management pre-leased 31,500 square feet. The lease, announced in February, covers the first three upper floors and now ties to a completed building. The remaining office area is roughly 28,500 square feet, not counting the retail and restaurant space.

Getting to completion meant taking apart a pair of inter-war buildings and saving what was worth saving. Nuffield House and Pegasus House were commissioned by Norwich Union in the 1920s, designed by architect George J. Skipper. The project partially demolished Grade II-listed Nuffield House while preserving its front and side facades. Pegasus House was redeveloped to restore Skipper's original masterplan, after the 1950s version had departed from it. Aviva is targeting BREEAM Outstanding and NABERS 4.5 Star ratings.

The same office cycle that sent a Nashville tower into hotel and timeshare conversion this month has produced a different answer on Piccadilly. Pivot paid $55.25 million for the Fifth Third Center and will split it between an LXR hotel and Hilton Grand Vacations timeshares. Aviva has instead redeveloped a pair of heritage buildings into more office space. One deal removes office supply; the other is trying to lease a renewed supply.

The Sona lease is the concrete fact. An asset manager leased just over half the offices before completion. A listed facade, a rebuilt interior and the energy ratings Aviva is targeting were enough to secure that commitment. The evidence is narrow, drawn from a corner of Mayfair, but it is real.

The unleased remainder is the next test. The 28,500 square feet still unoccupied, along with the Piccadilly retail parade and the Sackville Street restaurant, will have to lease at prices that justify the scale of construction. Whether those deals come near the level implied by the Sona pre-let will show how far this answer extends.