Blackstone Group LP (BX:US), the biggest manager of private-equity real estate funds, agreed to sell its 50 percent stake in London’s Broadgate office complex for more than 1.7 billion pounds ($2.66 billion), according to two people with knowledge of the deal.
A sovereign-wealth fund is under contract to acquire the interest, said the people, who asked not to be identified because the transaction is private. Norway’s government-wealth fund, which had been in talks to buy the stake, isn’t the purchaser, one of the people said, declining to identify the buyer. Blackstone had agreed not to sell the stake for three years after buying it in a 2009 deal that valued the whole complex at 2.1 billion pounds.
The New York-based firm also has begun raising a new fund for European real estate targeted at $5 billion, according to the people. It would be Blackstone’s fourth for European property. The company expects to raise the fund from mostly U.S., Middle Eastern and Asian investors, the people said.
Christine Anderson, a spokeswoman for Blackstone, declined to comment on the property sale and fundraising. The Financial Times reported the fundraising plans earlier today.
British Land Co. owns the remaining stake in Broadgate. Pip Wood, a spokeswoman for the London-based company, didn’t immediately return a telephone call for comment placed after regular U.K. business hours.
The sale of Blackstone’s interest in Broadgate “would certainly be among the biggest office deals” in Europe, said Dan Fasulo, managing director of New York-based property-research firm Real Capital Analytics Inc.
Broadgate, located in the heart of London’s financial district, includes 16 office buildings on 30 acres (12 hectares), along with restaurants, pubs, stores and health clubs, according to British Land’s website. About 30,000 people work in the complex, which has 4 million square feet (371,600 square meters) and 700,000 square feet under development, according to the website.
The office complex is about 96 percent occupied, according to the website.
British Land has said it plans to keep its stake in Broadgate after Blackstone sells its interest.
“We have a strong vision of how Broadgate will develop as a vibrant mixed-use estate in the heart of the City of London and expect it to benefit from its position around one of London’s most important transport hubs,” British Land Chief Executive Officer Chris Grigg said in a Jan. 29 statement.
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