Great Portland Estates has completed the sale of its majority share in the 100 Bishopsgate tower to its joint venture partner Brookfield for £47.2 million.
Great Portland has sold 37.5 per cent of its share to 50:50 JV partner Brookfield Properties as it focuses on the West End over the City.
Brookfield will pay in three tranches of £15.74m on completion, in October 2013 and April 2014. It retains 12.5 per cent as it ‘reduces key risks’ in the scheme.
Brookfield will continue as development manager, while Brookfield Multiplex has entered a pre-construction services agreement as the main contractor.
It is not going to start on site until pre-lettings are in place.
Planning consent was achieved in 2011 on the two-acre site, for a 948,600 sq ft mixed use development, including a forty-storey building providing offices and retail, and a second office and retail building of 49,600 sq ft. The Worshipful Company of Leathersellers (“the Leathersellers”) owns the freehold
Brookfield Properties will provide 100 per cent of the funding until October 2014, with GPE reimbursing Brookfield if they continue to hold a 12.5 per cent interest beyond that date.
Great Portland can now focus on other projects, including Rathbone Place, Hanover Square and the Jermyn St Estate. Planning for Rathbone Place will be submitted in March 2013.
Toby Courtauld, Chief Executive of GPE, said “We have worked hard with our partners Brookfield to prepare 100 Bishopsgate for a potential start on site once pre-lettings are in place.
“Now that these preparatory works are complete, the time is right for us to reduce our holding. 100 Bishopsgate promises to be a building of exceptional quality in the capable hands of the partnership’s development manager, Brookfield.”
Dennis Friedrich, CEO of Brookfield Office Properties, said “We are strong believers in the long-term outlook for London as a flourishing centre of commerce, as indicated by this transaction and other recent investments we’ve made in the City.
“Our venture with GPE has been successful and we look forward to our continued partnership as the 100 Bishopsgate development progresses.”
Analysts at JP Morgan Cazenove said Great Portland prefers the West End “due to constrained supply in the West End - 755,000 sq ft pa over next three years vs 2.6m sq ft pa historical average - and higher job growth”.