Legal & General has completed a £385 million refinancing of One and Two Southbank Place in Waterloo — the office buildings that include Shell’s UK headquarters — in a deal that underlines the continued appetite of institutional capital for prime, well-let London assets.
The transaction, agreed with developer and asset manager Almacantar, increases an existing £300 million facility to £385 million and extends its maturity from April 2026 to April 2029. L&G said the lending was made on behalf of its institutional retirement business and third-party clients, forming part of more than £1 billion of real estate debt it has deployed over the past year.
The two buildings together provide more than 545,000 sq ft of office accommodation next to Waterloo station, one of the busiest transport hubs in Europe. One Southbank Place is let to Shell International under a long lease as its UK headquarters, while Two Southbank Place is occupied by WeWork. The campus also incorporates retail and leisure units at ground level, creating a mixed-use environment that has become characteristic of major central London office schemes delivered in the past decade. L&G has reported occupancy across the buildings at around 97.4%, a level that strengthens the covenant case underpinning the refinance.
From a construction and development standpoint, the deal is less about new cranes on the skyline and more about the durability of prime assets in a more selective lending market. At a time when secondary offices face valuation pressure and refinancing challenges, the ability to secure a substantial, extended facility against a largely let, transport-rich scheme sends a clear signal about where capital is concentrating. Lenders are demonstrating that they will support assets with strong tenants, long income streams and high-quality specification — but that support is increasingly polarised.
Although the refinancing does not in itself fund new construction, it stabilises the ownership structure and provides financial headroom for continued asset management and potential upgrade works. In a market where occupiers are demanding higher environmental performance, better amenity provision and more flexible internal layouts, even relatively modern buildings require ongoing capital investment. Refinancing at this scale can support future retrofit, MEP enhancements or reconfiguration works that feed directly into the specialist contracting supply chain.
For London’s wider office market, the transaction reinforces a broader theme: prime, well-connected buildings remain financeable, particularly when underpinned by global corporate covenants. Waterloo’s connectivity, combined with the South Bank’s cultural and commercial appeal, has insulated the scheme from some of the pressures affecting less central stock. Shell’s presence provides income stability, while the flexible workspace component reflects the evolving nature of occupier demand.
There are, however, structural tensions beneath the surface. The fact that this is a refinancing rather than a development facility reflects a cautious investment climate. Higher interest rates compared with the ultra-low cost environment of the late 2010s have reshaped underwriting assumptions across the market. While institutions such as L&G, with long-dated liabilities and patient capital, are well positioned to lend into prime assets, more marginal schemes may struggle to secure comparable terms. That divergence has implications for construction pipelines, with work increasingly concentrated around core locations and established sponsors.
For contractors and consultants operating in central London, the message is nuanced but clear. The market for new speculative office development remains selective, yet prime, income-secured buildings continue to attract substantial capital backing. As landlords compete to retain and attract blue-chip tenants, the emphasis is likely to fall on refurbishment, sustainability upgrades and enhancement rather than wholesale expansion.
In that sense, L&G’s £385 million refinancing of Southbank Place is both a vote of confidence and a marker of caution: confidence in the enduring strength of well-located London offices, and caution in a market where capital is discriminating sharply between the best assets and the rest.