Ritblat wins Broadgate centre

TOM STEVENSON

Deputy City Editor

John Ritblat completed his dream of acquiring London's most prestigious office development yesterday after he persuaded the receiver to Godfrey Bradman's failed Rosehaugh group to part with his 50 per cent share in the Broadgate centre for pounds 120m.

British Land, where Mr Ritblat is chairman, owns the other half of Broadgate, having acquired it in March as part of its takeover of Stanhope, Rosehaugh's partner in the popular but heavily indebted centre.

Consolidating his position in the City's leading office development will be viewed as an expression of faith in the faltering commercial property market, where over-supply continues to depress capital values.

Broadgate came to characterise the late 1980s boom and the bust that followed. The development broke new ground, both in its location in the formerly unfashionable area surrounding Liverpool Street railway station, and in the way the buildings were funded.

But it was a financial disaster, dependent on ever-rising rents and ultimately bringing down both of the companies that collaborated in the scheme.

Analysts welcomed the deal, which continues an extended spending spree by British Land since the recession made prime assets with potential for rental increases available at reasonable prices. The company benefited from entering the downturn with a much stronger balance sheet than many of its peers.

The deal means British Land leapfrogs MEPC into second place in the quoted property sector behind Land Securities, with a portfolio of properties valued at more than pounds 4bn and a market capitalisation of pounds 1.7bn. Since March alone it has spent more than pounds 400m.

News of the acquisition accompanied the purchase of seven Tesco superstores for pounds 148.2m, which British Land will add to its portfolio of almost 100 supermarkets. That deal is to be financed by a one-for-six placing and open offer at 370p a share to raise pounds 222.5m.

The placing, British Land's second in six months, pushed the company's shares 13p lower to 382p. In March it raised pounds 211m to finance the purchase of Stanhope via a one-for-five issue at 352p. As in March, the latest issue has been underwritten by Warburgs and UBS, British Land's joint brokers.