The widely tipped move by Royal & Sun Alliance into 3 Piccadilly Place in Manchester has been called off due to the threat of extra liability brought about by new accounting rules.
R&SA had around 60,000 sq ft under offer at the 200,000 sq ft building, developed by Argent and owned by Carlyle.
The International Accounting Standards Board is consulting on changes to the way leases are recorded by tenants. The IASB is recommending that the full term of the lease is shown on the balance sheet, which put off R&SA as the liability would have been too large for the 10-year lease being discussed at £25/sq ft. If approved, the new rules would be introduced in April 2012.
R&SA is based in 17 New York Street, Piccadilly and will remain in its current office.
GVA and Savills advise Carlyle and Argent. Spring 4 advises R&SA.