British Land sells half of Broadgate Circle

Published 18th Sep 2009

As previously predicted by AllAboutProperty.com ...
British Land confirmed today that it would sell half of its Broadgate Circle estate to Blackstone, the US private equity firm, freeing it up to make a fresh investment drive into the property market.

Despite raising only about £77m in cash, joint ownership of the 30-acre London office estate will allow the real estate group to offload half of the debt used to finance the purchase of the £2.2bn estate and reduce its exposure to the City office market.

The UK’s second-largest property group said that the sale would allow it to diversify its portfolio and make fresh acquisitions as market conditions improve. Broadgate is British Land's largest asset making up 27 per cent of its portfolio. This will fall to 16 per cent after the sale.

“Reducing exposure to large single assets is the strategy I put in place when I arrived and this deal brings that phase to a close,” said Chris Grigg, the former Goldman Sachs banker who took over as chief executive of British Land in January.

“The transaction increases our capacity for profitable investment opportunities elsewhere as we reinvest in more diversified, liquid assets.”

British Land’s balance sheet was bolstered with a £740m rights issue in March. It is expected to complete its purchase of a retail park next week, its first new property since the downturn began.

Broadgate’s biggest tenants include UBS, Royal Bank of Scotland and Herbert Smith, the law firm.

Source: ' Times '

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