In May of this year, US firm Salesforce secured consent from the owners of London’s Heron Tower, Heron International, to rename the building the “Salesforce Tower”, as part of its tenancy agreement to lease 50,000 sq ft over six floors. The agreement met with significant opposition from the building’s other tenants which include Microsoft reseller Cisillion and mobile payments company Powa Technologies.
When brought before the City of London Corporation’s planning and transport committee last week, the rebranding bid was rejected. The committee stated that whilst “Salesforce.com is becoming a large new occupier” it will not be “sufficiently dominant to justify an authorised building name.” This ruling effectively sets a precedent that prohibits minority tenants from seeking naming rights over a building.
However, regardless of the committee’s final decision, it is interesting to note that Heron International had granted its permission for the rebrand as part of its lease agreement with Salesforce. As owners look to attract occupiers and secure lucrative lease deals, how far are they having to compromise? The Salesforce example suggests that occupiers currently have more bargaining power in their discussions with landlords and that owners are having to propose new and increasingly creative offers in order to secure tenants.
This case also highlights the fierce competition between occupiers to secure valuable brand profiling. Salesforce understood that putting its name on a major London landmark would provide a unique opportunity for aggressive self-promotion, beyond the physical branding of the building to include any associated marketing material.
Understandably then, the committee’s decision came as a relief to other occupiers at the Heron Tower who were outraged that they might have to feature their competitor on their own business cards. Powa Technologies CEO Dan Wagner applauded the council’s decision as a “victory for the City of London and for common sense.”
Effectively, it seems that the lines between property deals and marketing are increasingly blurring. Despite the council setting a precedent barring future renaming attempts by a minority tenant, the big point is that the Salesforce Tower rebrand was a very real possibility and formed part of a lease agreement between owner and occupier.
For now, the building will simply be known as 110 Bishopsgate. But who knows? On another day we could have all have been calling it the Salesforce Tower and the Shard, ‘Tiffany Heights’.