Private-equity giant Blackstone Group L.P. (BX) has agreed to sell its 50 percent interest in London's Broadgate office complex for about 1.7 billion British pounds of $2.7 billion to Singapore's sovereign wealth fund GIC, according to media reports on Wednesday. The deal is billed as the UK's largest ever single real estate deal.
GIC Private Limited or GIC, previously known as The Government Investment Corp. Pte. Ltd. of Singapore until July 23, is a sovereign wealth fund created by the Government of Singapore to manage $100 billion of Singapore's foreign reserves.
Blackstone acquired the stake in November 2009 from real estate investment trust British Land Co. Plc (BTLCY, BRLAF, BLND.L) in a deal valued 1.07 billion pounds to create a joint-venture. The consideration included 987 million pounds of third party debt and 77 million pounds for the 50 percent stake.
Blackstone had then agreed to a lock-up term, whereby it will not sell the stake for a period three years. Meanwhile, British Land continues to own the remaining 50 percent stake in Broadgate.
Reports on the sale two days ago had not revealed the name of the purchaser, but had speculated that the buyer was a Norwegian sovereign-wealth fund, Norges Bank Investment Management, as they were reportedly in talks to buy the stake.
Broadgate is the largest office complex in London's financial district and is a large 30 acre office and retail complex in the city of London with 16 Class A office buildings as well as restaurants, pubs, stores and health clubs.
Several other large pension funds, including investors from North America, were reportedly in the fray and showed interest in the deal.
Further, New York-based Blackstone has reportedly begun raising a new fund for European real estate targeted at $5 billion. The new fund will be Blackstone's fourth for European real estate as it sees more opportunities abroad. Blackstone is expected to raise the fund from mostly U.S., Middle Eastern and Asian investors.
Blackstone had also recently agreed to buy 80 U.S. apartment properties from General Electric Co.'s (..) GE Capital unit for about $2.7 billion, according to a Bloomberg report. The sale by GE is part of its strategy to shrink its finance division by selling real estate holdings.
BX closed Wednesday's regular trading session at $21.61, down $0.16 or 0.73% on a volume of 2.33 million shares.
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