British Land has acquired the majority of the assets of the 11 acre Paddington Central estate, which it says has “major development potential”.
The developer will own 1m sq ft of a 1.6m sq ft estate once developments on the site are completed.
The office-led, mixed-use estate lies near Paddington station, and comprises seven modern buildings and a retail and leisure cluster, along with two sites with 355,000 sq ft of consented office development worth £180m.
These developments are at four and five Kingdom Street, and were bought at £175 per sq ft.
British Land says it intends to add to existing consents, starting on site towards the end of 2014.
In a complex transaction combining a number of ownerships, arranged with the majority owner Aviva Investors, British Land has acquired three of the existing buildings and the retail and leisure cluster.
A further 80,000 sq ft of potential mixed-use development under the two development sites – currently occupied by Crossrail - will revert to British Land by 2018.
British Land is increasing its focus on London and the West End, with the South East and the capital currently making up 57 per cent of the group’s portfolio.
British Land chief executive Chris Grigg said the investment was in line with the developer’s strategy of “increasing exposure to London” and that the purchase was its “most significant acquisition” since an equity placing in March.
Head of Offices Tim Roberts said: “With the benefit of improving local infrastructure, the regeneration of Paddington as a whole, plus our ability to improve and complete the estate, I am confident we can take Paddington Central to the next level and in the process, deliver attractive returns.”