Blackstone mulls sale of Broadgate stake
20 August 2013
In one of Europe's largest office deals, Blackstone Group LP is planning to sell its stake in London's Broadgate complex for more than £1.7 billion ($2.66 billion).
Blackstone bought the stake in 2009 from property firm British Land. The purchase value then was 77 million pounds ($120.9 million), according to British Land's 2012 annual report (See: Blackstone sells stake in Cineworld; buys into British Land).
While buying, Blackstone, the biggest private equity real estate fund manager, had agreed not to sell the stake for three years.
Broadgate, the largest office complex in London's financial district, is a 32-acre office and retail complex with 16 Class A office buildings as well as restaurants, pubs, stores and health clubs.
The name of the purchaser has not been revealed, though a Norwegian sovereign-wealth fund was reportedly in talks to buy the stake.
New York-based Blackstone Group, owner of Hilton Worldwide Inc, was planning a $13 billion refinancing of its debt ahead of the listing of the world's largest hotel chain in early 2014. (See: Blackstone plans $13 bn debt refinancing for Hilton Worldwide ahead of IPO)
Also, the private equity real estate fund major has reportedly begun raising a $5 billion new fund targeted at European real estate, which will also be Blackstone's fourth for European real estate as it sees more opportunities abroad.
Blackstone is expected to raise the fund from mostly US, Middle Eastern and Asian investors.
Blackstone had also recently agreed to buy 80 US apartment properties from General Electric Co's (GE) GE Capital unit, for about $2.7 billion.
The sale by GE is part of its strategy to shrink its finance division by selling real estate holdings.