BRITISH LAND confirmed yesterday it plans to keep its 50 per cent stake in the £3.1bn Broadgate Estate and work closely with Blackstone as it looks to sell its half in a deal that could net the private equity firm an eightfold return.
The FTSE developer sold down its stake in Broadgate to Blackstone in 2009 for just £77m. But its stake has since shot up in value to more than £500m, according to British Land’s 2012 annual report.
Lucinda Bell, finance director, said: “It was the right decision at the right time. We benefited from a number of strategic aims – to reduce our concentration on individual assets and to rebalance the portfolio between the City and the West End.”
The estate, which is home to some of finance’s biggest names including UBS and Deutsche Bank, could interest overseas sovereign wealth funds and pension funds, analysts said.
In a third quarter trading update, British Land said it continued to see good demand for retail space despite weak consumer spending and a surge in retail collapses, with lettings and renewals achieved at 13.1 per cent ahead of ERV (estimated rental value).
Retail occupancy remained flat at 98.1 per cent with 1.2 per cent of tenants in administration.
Overall it has secured 665,000 square feet of lettings, pre-lets and lease renewals across its portfolio in the period. It also agreed heads of terms for an 111,000 sq ft pre-let with Amlin at The Leadenhall Building, which is now 50 per cent pre-let.