Broadgate up for grabs as British Land rules out bid
Tuesday 29 January 2013
British Land boss Chris Grigg today ruled out a swoop to buy back the 50% stake in Broadgate, the City’s biggest office estate, it sold near the bottom of the market to Blackstone three years ago.
The property giant sold the share in the £3 billion development around Liverpool Street station to the fund manager in 2009 to help shore up its balance sheet in the wake of the financial crisis and collapsing property values.
But Blackstone has confirmed that it is looking to take the profit from its share in the estate, which boasts investment bank UBS and broker Icap among its major City tenants.
Grigg said: “There were good reasons why we took ourselves down to 50%. It was about giving us strategic room to invest in the West End developments.
“We would not typically expect to buy it back, although we expect there will be plenty of interest. It would be a big deal (for us) and for me it’s more to do with maintaining a strategically balanced portfolio.”
He said likely buyers would be from among the major sovereign wealth funds and pension funds scouring for assets in the London property market. “These are huge funds with a long-term view,” he added.
Under the deal in 2009, Blackstone paid £77 million for the 50% stake in Broadgate and took on £987 million of debt, but its equity stake jumped in value to more than £500 million last year and is now thought to be closer to £800 million.
The scheme, which opened in 1991, now includes 16 separate buildings covering four million sq ft and should be boosted in 2018 with the arrival of Crossrail. British Land had to win a protracted battle with English Heritage to press ahead with the £340 million 5 Broadgate redevelopment last year.
Despite “tough” conditions, the group’s overall UK occupancy levels remain high at 97.7%.
The firm also reported strong interest in its development pipeline in the City, including its Cheesegrater skyscraper, which is 50% pre-let. British Land shrugged off the pain on the high street with more than 98% of its retail space occupied despite the collapse of retailers like HMV and Jessops. Its new retail lettings were made an impressive 13% ahead of estimated rental values over the past three months.
Panmure Gordon’s Mark Hughes said: “The company is well positioned given the current economic climate. Its stable portfolio and predictable income stream should continue to deliver outperformance.”
- 1 The political parties aren't all the same – which means 2015 will be a 'big-choice' election
- 2 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 3 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
- 4 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 5 Naomi Wolf reacts to Isis 'conspiracy theories' critism after she questions whether beheading videos are real
President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
UK weather: Warning for more snow and ice as freezing temperatures and gales hit Britain
Three killed at South Korean nuclear reactor days after hackers target country's atomic agency
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Immigrants make UK racist, says Ukip councillor Trevor Shonk
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...