Qatari investor acquires Land Secs development for EUR 300m

Qatar-based Barwa Real Estate is to acquire the Park House development in Mayfair, London from UK REIT Land Securities for £250 mln (EUR 299 mln) .

Land Securities announced on Thursday that Barwa has agreed to pay the sum for the site, all of the construction costs and a profit share on completion. Of the total investment volume, £225 mln will be paid immediately and £25 mln will be paid on practical completion.

The project will provide 28,800 m² of retail, office and residential space at Park House, 453/497 Oxford Street, London. Construction of the scheme started on site last month, with completion due in November 2012.

Land Securities will act as development manager responsible for delivery of the project with construction works paid for by Barwa.

A profit share will be paid by Barwa within 12 months of practical completion. Based on current expectations in relation to office and retail rental values this profit share is estimated to be about £33 mln and is capped at £50 mln.

Robert Noel, managing director of Land Securities' London Portfolio, said: 'Park House is the largest speculative development in Mayfair for a generation and this sale enables us to realise the majority of our profit ahead of schedule, with significantly reduced risk and with no capital employed. We will recycle the capital to invest into our growing speculative development pipeline targeting the further return opportunities offered to our shareholders through early delivery into a forecast supply constrained market.'

Land Securities acted directly and CB Richard Ellis and PCP Capital Partners advised Barwa.