Land Securities Sells London Project To Barwa For GBP250 Million
June 17 2010 - 2:06AM
Dow Jones News
The U.K.'s largest landlord and developer Land Securities Group
PLC (LAND.LN) Thursday said it sold its Park House development in
London to Qatar-based international developer and investor Barwa
Real Estate Co. (BRES.DO) for GBP250 million.
Barwa will pay GBP225 million immediately and GBP25 million on
practical completion to buy the site, and it will meet all of the
construction costs and pay Land Securities a share of the
profit.
Construction started in May and completion is due in November
2012. Land Securities will act as development manager responsible
for delivery of the project.
Barwa will pay a profit share within 12 months of practical
completion. Based on current expectations for office and retail
rental values, this profit share is estimated at about GBP33
million and is capped at GBP50 million.
"Park House is the largest speculative development in Mayfair
for a generation and this sale enables us to realize the majority
of our profit ahead of schedule, with significantly reduced risk
and with no capital employed," said Robert Noel, managing director
of Land Securities' London portfolio.
Land Securities plans to invest the capital into its growing
speculative development pipeline.
Park House, at 453/497 Oxford Street, is a development of
330,000 square feet comprising 163,000 square feet of offices,
88,000 square feet of retail space and 70,000 square feet of
residential accommodation.
The acquisition is the first major wholly owned investment made
by Barwa in the U.K. and fits with Barwa's strategy to invest in
international commercial property, the company said.
"The investment demonstrates our commitment to Europe as part of
our growth strategy and signals our interest in strengthening our
portfolio interests in London," said Ghanim bin Saad Al Saad,
chairman and managing director of Barwa.
-By Anita Likus, Dow Jones Newswires; +44 20 7842 9407;
anita.likus@dowjones.com