In one of the largest sales of the year, the premier equity firm Blackstone Group is going to buy 50 percent shares of the London based Broadgate office complex, which holds the pride of being the most advanced and biggest construction project of the 80s. The property is situated close to Liverpool Street station and belongs to the investment giant British Land Co. PLC, which deals in property and investments.
The cost of the entire property has been estimated to be over £4 billion, which means the sold property rate hovers around half of it. However, Blackstone has been asked to pay just £77.5 million for the time being, while the rest of the payment will be accepted as a debt by British Land.
The Broadgate asset has been considered as a class one deskspace asset and the opportunity of buying such an esteemed property is a great one, according to Peter Rose from Blackstone. However, the deal is being seen as an equally beneficial venture for British Land too, as according to business analyst Harry Stokes who is working for Evolution Securities Ltd, the deducted rating on the stock will give Broadgate offices chance to have a low-key exposure.
According to chief executive of British Land Chris Grigg, the deal will pave the way for other investment possibilities in other business locations across the UK, especially in quick assets. It is also worth noting that on one hand, the shares of British Land rose from 18p to 530p, while on the other, the shares of Broadgate went down by 33% due to crisis in the UK commercial property market. This has been said to be the main reason for setting up a budget of £100mn for a complete restructuring of Broadgate. However, it is doubtful as to whether a sum of £100 million will suffice for renovation of such a huge property as Broadgate.
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