A new joint venture announced this morning marks the start of the construction a significant office tower in heart of the City of London.

Land Securities and Canary Wharf Group have announced today that they have formed the 20 Fenchurch Street Limited Partnership (the Partnership), a 50:50 joint venture partnership to develop 20 Fenchurch Street, EC3.

The existing property, currently a cleared site with some ancillary retail neighbouring holdings, has been sold by Land Securities to the new partnership at a price of £90.2 million.

Planning consent for the proposed 37 storey building was granted in October 2009. It will provide approximately 690,000 sq ft of world class space in floor plate sizes of 14,000 sq ft to 28,000 sq ft with a skygarden on the top three floors. It is suggested that the skygarden (pictured) will be open to the public and will be the highest public park in London. Following criticism about the height and impact on the views of St Pauls Cathedral the original design has been reduced from 45 to 36 above-ground floors.

The proposed office block has been given the nickname of Walkie Talkie due to the distinctive, top-heavy design of the structure. The tower has been designed by the Uruguayan born architect Rafael Viñoly. The upper floors of the tower will offer more spacious floor plates than those lower down the structure along with far reaching views of London. The offices will have a BREEAM rating of ‘Very Good’ and will be marketed as premium Grade A.

The Partnership will construct the project under a staged programme at an anticipated total development cost of £500m. To enable a condensed programme, construction of the substructure of the building and detailed design of the superstructure is to start immediately. Completion to the ground floor level is planned for February 2012. Construction of the superstructure will follow, with completion of the project anticipated in the second quarter of 2014.

George Iacobescu, Chief Executive Officer of Canary Wharf Group, said: “We are looking forward to this opportunity to apply our extensive experience as a developer of large, high specification and bespoke office buildings for a diverse range of clients. We are also delighted that on this occasion we will be working alongside Land Securities with its own impressive pedigree and track record. This joint venture project will provide further evidence of our approach to the development and construction of very high quality buildings in London.”

Indicative rental prices have not been published. Commercial agents Knight Frank have recently published a report estimating a rise in rental prices for floor space inside the Square Mile are set to rise by 37% to £58 / sq ft by the end of 2012.