McAleer & Rushe will remain as construction contractor for an office development at 2-14 Baker Street, after British Land bought the site from the Northern Ireland firm for £29m.
The building is situated on the corner of Portman Square, just north of Oxford Street. The existing 93,000 sq ft property was built in the 1950s and is largely vacant.
Planning consent was granted in 2009 for a new 139,000 sq ft office with retail units at ground floor level.
A joint development agreement has now been entered into with McAleer & Rushe whereby British Land acts as the development manager and McAleer & Rushe, an established construction group based in Northern Ireland, is the contractor for the scheme. As part of the sale arrangement, McAleer & Rushe will take a share in the development profits.
Redevelopment is planned to start during the course of this year with completion in 2013. The total cost of development including land is expected to be around £100m.
Tim Roberts, British Land's head of offices, said: "This is a great opportunity for British Land to buy into one of the limited number of prime central London locations with planning consent at an early stage in the recovery cycle. We are optimistic about the outlook for rental growth in the West End office market and expect to generate strong returns as we leverage our development expertise. We look forward to working with McAleer & Rushe on this exciting project."
Eamonn Laverty, managing director of McAleer & Rushe, said: "By working with British Land we have brought together a wealth of London office development and construction experience which we believe will produce one of the best office buildings in the coming market, whilst also achieving a development funding solution in this difficult economic climate."