Blackstone and British Land, the London-listed real estate company, are poised to agree a pre-let with Swiss bank UBS at Broadgate, their jointly-owned central London office complex.
The future residency of UBS, the largest current occupier at the 16-building, 4.4 million square foot scheme next to Liverpool Street Station, was considered a significant risk when Blackstone acquired a 50 percent stake in the complex from British Land last September.
However that risk is expected to be somewhat diminished following the announcement that Bluebutton Properties, the complex's joint venture company, has entered into “exclusive non-binding heads of terms to construct UBS a new building”.
The bank is expected to agree a pre-let on about 600,000 square feet across two buildings, according to the Daily Telegraph. The newspaper reported that UBS has a break-clause in its current lease that could be executed in 2014, however this deal would ensure it stayed for at least another five years, according to one source PERE contacted familiar with the matter.
Blackstone paid £1.07 billion (then €1.18 billion; $1.73 billion) for the stake in the complex, which also houses other financial giants such as Deutsche Bank, Henderson Global Investors, RBS and Lloyds. The firm completed the deal via £77 million of equity and the assumption of approximately £1 billion in debt on behalf of its €3.1 billion Blackstone Real Estate Partners Europe III and its Blackstone Real Estate Partners VI funds.