The new building for the London Mayor and Assembly (elected on 4th May) to be constructed on a site near Tower Bridge will be a very good deal for London announced Minister for London Keith Hill.

The building, designed by Foster and Partners, will be leased from developer CIT Group on a 25-year lease. "We have reached agreement with the developer on a rent of £393 per square metre (£36.50 per square foot). This is frozen until 2007. The fixed rent at practical completion of the contract will be £4.75m per annum," added Mr Hill.

"There are no similar buildings in the area. However, the £36.50 compares favourably with current rents, for top quality space in prime locations. The developer will meet the cost of the base building which is estimated at around £40m."

The new building will be ready for the Mayor and Assembly in about two years' time. Until then they will be accommodated in Romney House, Marsham Street. Ken Livingstone's views on upward only rent reviews are not known.

Richard Byatt