June 15 (Bloomberg) -- British Land Co., the U.K.’s second- largest real estate investment trust, will proceed with plans to construct an office building for UBS AG at the Broadgate complex after the government rejected a proposal to protect the site from redevelopment.
“I am delighted by today’s decision as it allows Broadgate to continue to evolve as a sustainable and flexible office location,” British Land Chief Executive Officer Chris Grigg said today in a statement.
The company plans to knock down two buildings in the City of London office development and construct the UBS offices in partnership with Blackstone Group LP at a cost of 850 million pounds ($1.4 billion).
English Heritage, a state-funded conservation group, recommended on June 3 that Broadgate should be given the second- highest level of protection from demolition. Culture Secretary Jeremy Hunt rejected the group’s recommendation, allowing the project to go ahead, British Land said.
The new building at 5 Broadgate will have about 700,000 square feet (65,000 square meters) of space, making it British Land’s biggest project.
British Land rose as much as 2.8 percent in London trading after declining earlier in the day. The stock was up 1.9 percent at 600 pence as of 10:56 a.m. That lifts the gain this year to 14 percent.
“Broadgate Square may not be everyone’s idea of heritage, but every decade has its architectural high points, and the 1980s are no different,” English Heritage said in a statement today. “There has been some suggestion that listing stunts investment or creates ‘streetscape museums’. This is to entirely misinterpret the purpose and effect of listing,” the organization said.
The new project will enable UBS, Switzerland’s biggest bank, to bring together its operations into one building in the City, British Land said.
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