British Land has completed the sale of half of its £2.2bn Broadgate office complex to US private equity group Blackstone.
In a stock market announcement the REIT this morning said it had created a joint venture with Blackstone to hold the 30-acre City of London estate.
Under the terms of the jv, real estate funds Blackstone Real Estate Partners Europe III and Blackstone Real Estate Partners VI will take a 50% interest in Broadgate valued at £1.07bn.
The Blackstone Partners' share includes £987m of third party debt, or 50% of the debt secured against the assets of Broadgate, and a £77m cash payment. The price reflects a yield of around 7.1% .
Chris Grigg, chief executive, said. “Reducing exposure to large single assets is the strategy I put in place when I arrived and this deal brings that phase to a close.
“The transaction increases our capacity for profitable investment opportunities elsewhere as we reinvest in more diversified, liquid assets."
British Land will be asset manager and administrator of the joint venture and continue to provide property management facilities and services for tenants.
Bank of America advised Blackstone and UBS advised British Land.