Blackstone Group LP (BX:US) is seeking to sell a west London office park for 67 percent more than it paid for the property 18 months ago, two people with knowledge of the matter said.
Blackstone, manager of the world’s largest real estate fund, is offering Chiswick Park for about 800 million pounds ($1.3 billion) and hired CBRE Group Inc. (CBG:US) to sell the property, the people said. They asked not to be identified because the information is private. Ken Caplan, Blackstone’s head of European real estate, declined to comment.
Blackstone bought Chiswick Park Unit Trust, the fund that owns the property, in April 2011 for 480 million pounds. Since then, Blackstone cut vacancies at the 33-acre (13-hectare) park to 1 percent from 9 percent. In November, the company started work on a 215,000 square-foot (20,000 square-meter) building on the site that Aker Solutions will lease. Other Chiswick Park tenants include Walt Disney Co., Tullow Oil Plc and Halliburton Co.
The completion of the building next year will increase the amount of space at the park to 1.33 million square feet, excluding consent for an additional 333,000 square-foot office building, the park’s last site available for development.
Annual rents at Chiswick Park are, on average, about 45 pounds a square foot, 10 pounds more than when Blackstone acquired the property, the people said. That reflects a shortage of large modern or recently refurbished office space in London.
Senior loans of 302.3 million pounds funding the purchase of Chiswick Park were sold as commercial mortgage-backed securities in June 2011 in what was Europe’s first CMBS sale since 2007.
“Prepayment on the sale of the asset should not be taken as a given,” Deutsche Bank AG asset-backed bond analysts said in a note to investors today.
The purchase was also funded by a 61 million-pound mezzanine loan, the analysts said. Cash-rich investors, like a sovereign debt fund, may be deterred by the high leverage, so “we would therefore expect any sale to encompass the prepayment of the loan (plus swap)” and additional fees, they said.
Property Week reported the planned sale yesterday.
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