Harbour Exchange comprises two redeveloped office buildings, housing data centre and office space
UK’s Land Securities Group Plc said on Friday that it has agreed to sell Harbour Exchange, a London office property, to Blackstone Inc for 196.5 million pounds ($262.82 million) as the commercial landlord reshuffles its portfolio.
BlackStone’s European Property Income Fund (BEPIF) has paid £196.5 million for the property, representing a net yield of 4% for Land Securities. BEPIF was set up earlier this year and primarily targets property in the logistics and office markets.
Harbour Exchange, located in the Docklands area, comprises two redeveloped office buildings, housing data centre and office space, and was let to Equinix (UK) Ltd with an unexpired lease term of nearly 20 years.
Landsec said the disposal was in line with the strategy it set out last month of focusing time and investment on Central London offices, major retail destinations and urban neighbourhoods in London and other major regional cities.
Many UK commercial landlords are looking to diversify into mixed-use properties and focus on higher-return opportunities as the pandemic erodes the valuations of retail and office spaces, and an extended moratorium on rent hurts their income streams.
Through this (Harbour Exchange) disposal, we are recycling capital into opportunities where we can bring to bear Landsec’s skills and expertise to drive growth and returns for our investors, said Marcus Geddes, managing director, Central London, at Landsec.
Landsec said the completion of the Harbour Exchange sale to Blackstone European Property Income Fund will take place before the end of the year.
Last week, Landsec said it had bought a 75% stake in MediaCity, the UK’s biggest tech and media hub outside London, for $580 million, just two days after it announced the purchase of regeneration firm U+I for $260 million.