News: GIC buys London office stake for $3.5b
GIC buys London office stake for $3.5b
The Straits Times. Published December 26, 2013
By Alvin Foo
SINGAPORE investment firm GIC is buying a large stake in a mega office complex in London’s main financial district, in what is believed to be its biggest property foray in Europe.
GIC is acquiring private equity firm Blackstone’s 50 per cent interest in Broadgate near Liverpool Street station in a deal said to be worth over £1.7 billion (S$3.5 billion), it said yesterday.
The purchase is also believed to be GIC’s biggest investment this year, based on public announcements. Analysts said it is also one of Europe’s biggest-ever office sales.
“It provides a rare opportunity to invest in a world-class asset,” said Mr Christopher Morrish, GIC Real Estate’s regional head for Europe.
The property has development potential that GIC can tap on to create more value.
GIC said in a statement yesterday: “The estate will give us an attractive combination of stable long-term income with the potential to create additional value through active management, repositioning of the office buildings and by enhancing the retail and leisure offer.”
Broadgate is touted as a “world-class” office complex. About 30,000 people work in the cluster of 17 office buildings and shops and restaurants spanning 4.7 million sq ft on 12ha.
Major banks such as UBS, the Royal Bank of Scotland, Deutsche Bank and Credit Agricole are tenants.
The complex will also gain from having a station that is part of a new rail project due in 2018. This will cut travel time from Broadgate to Heathrow Airport by half to 30 minutes.
Blackstone bought its 50 per cent stake from British Land in 2009 in a deal that valued the entire complex at £2.1 billion and invested in improvements. British Land owns the other half.
GIC’s purchase also includes Blackstone’s stake in 5 Broadgate, a new 710,000 sq ft office building set for completion in 2015. It will eventually be home to UBS offices.