Great Portland Estates has agreed to sell a 37.5% interest in The 100 Bishopsgate Partnership to joint venture partner Brookfield Properties Corporation for £47 mln (EUR 58 mln). The cash deal increases BPO's stake to 87.5%.
Great Portland Estates has agreed to sell a 37.5% interest in The 100 Bishopsgate Partnership to joint venture partner Brookfield Properties Corporation for £47 mln (EUR 58 mln). The cash deal increases BPO's stake to 87.5%.
As part of the transaction, GPE will receive around £16 mln on completion, with equal further payments of £16 mln in October 2013 and April 2014, bearing an interest rate of 5.5%. GPE will retain 12.5% of the partnership, subject to a put and call arrangement with Brookfield.
The partnership owns the leasehold interest in 100 Bishopsgate, a two-acre site fronting Bishopsgate in the City. Planning consent was achieved in 2011 by the partnership for a 948,600 sq ft (88,120 m2) mixed-use development including a 40-storey building providing offices, ancillary retail of 22,250 sq ft, and a second office and retail building of 49,600 sq ft.
Brookfield will continue to act as Development Manager to the Partnership and Brookfield Multiplex has also entered a pre-construction services agreement to act as the main contractor for the development. GPE will no longer act as both property and asset manager as Brookfield will assume those roles.
Brookfield will provide 100% of the funding for the partnership until October 2014, with GPE reimbursing Brookfield if they continue to hold a 12.5% interest beyond that date.
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.'
