Broadgate sale to net £600m profit for Blackstone

 

Blackstone, the US private equity firm, is set to make hundreds of millions of pounds profit on the sale of its 50% stake in Broadgate, the office complex which is home to some 30,000 City workers.

The sale, to an unnamed sovereign wealth fund, has reportedly gone through for £1.7 billion — an enormous uplift on the original £1.07 billion Blackstone put up to buy its share from developer British Land just four years ago.

That deal was struck with Blackstone putting up £987 million of debt and £77 million of equity. It is not clear how today’s sale has been structured but Blackstone has almost certainly emerged with a clear profit of more than £600 million. City office values have soared over the past four years as foreign investors, in particular, have viewed prime London property as a safe haven.

Broadgate is made up of 16 office buildings that cover 4 million square feet with a further 700,000 square feet currently under construction, which will become UBS’s new London headquarters.

Blackstone is currently raising a new $5 billion fund to invest in European property and put its Broadgate stake up for sale at the start of this year. The buyer is thought to come from the Far East rather than the original favourite, the Norwegian state pension fund.

Neither British Land nor Blackstone would comment.

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