This Week's London Deal Sheet
The Deal Sheet is a weekly compilation of Greater London and beyond's biggest leases, sales, financing deals, construction updates and personnel moves. Have news you’d like to submit? Email mark.faithfull@bisnow.com.
UK REIT Landsec has completed the acquisition of an additional 17.5% stake in shopping centre Bluewater in Kent from GIC for £120M, increasing its ownership in the retail destination to 66.25%.
Based on the income Landsec’s existing investment in Bluewater generated over the year to March, this acquisition increases the company’s net rental income by £10.3M on an annualised basis, the company said, and reflects Landsec’s objective to grow its investment in major retail destinations, recycling capital from noncore disposals.
The landlord had recently announced that Inditex would open a 10K SF Pull & Bear and a 10K SF Bershka store at the centre.
“This transaction underscores our ability to continue to create value through prime investments in scarce, major retail destinations with attractive return profiles,” Landsec Managing Director for Retail Bruce Findlay said in a statement. “Bluewater is one of the UK’s top retail destinations and a key part of our strategy to further build our relationships with key brands.”
DEALS
Kennedy Wilson and its partner have acquired Heathrow Estate, a multi-let industrial property in west London, for £87M, excluding closing costs. The site comprises approximately 300K SF of warehouse and ancillary office space, 84% of which is leased to a mix of occupiers, including Asendia, Tailsco and HSS Hire.
Heathrow Estate is in an established industrial hub, and the acquisition falls within Kennedy Wilson’s global industrial platform, which totals more than 12M SF.
“This acquisition demonstrates our ability to identify attractive investments in established distribution locations with strong underlying fundamentals that provide excellent potential for rental growth,” Kennedy Wilson Europe President Mike Pegler said in a statement.
“We are pleased to expand our growing global industrial platform, and we are now focused on executing the business plan while leveraging our expertise to capture significant reversion through accretive and targeted capital expenditure.”
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Blackstone Real Estate has announced that funds managed by Blackstone have completed the acquisition of Village Hotels from affiliates of KSL Capital Partners. The price is reported to be as high as £850M.
Village Hotels owns and operates 33 assets in large regional cities and suburban areas across the UK. Representing 4,400 hotel keys, it offers traditional full-service hotel stays, fitness clubs, food and beverage outlets and coworking spaces.
“We see great potential in lodging and leisure as a sector, especially where we can support strongly positioned businesses that deliver exceptional experiences to their customers,” Blackstone Europe Head of Real Estate James Seppala said in a statement.
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Warehouse REIT has completed the sale of £57.5M of single-let assets in three separate transactions. The combined sale price is in line with the 31 March valuation and represents a net yield on passing rent of 5.8%.
This brings total sales since its deleveraging plan was announced in November 2022 to £165.2M. The transactions comprise Barlborough Links in Chesterfield, sold for £46M; Parkway Industrial Estate in Plymouth, sold for £6.3M; and Celtic Business Park in Newport, sold for £5.2M.
Following the sales, Warehouse REIT added that it “remains committed to extracting value” from Radway Green, its development site in Crewe, where it said negotiations are progressing.
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Target Healthcare has completed the disposal of four UK care homes for £44.5M to the incumbent tenant. The sale price reflects a “modest premium” to the portfolio’s carrying value on 31 December, with an implied net initial yield of 5.6%.
Proceeds from the disposal, which represented 326 beds and circa 4.6% of the group’s overall portfolio value, will be used for partial repayment of the group’s revolving credit facilities to reduce its unhedged interest cost. Overall, the disposal reduces net loan-to-value by approximately 3.8%.
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Harworth, a specialist regenerator of land and property for sustainable development and investment, has exchanged contracts for the conditional sale of 48 acres of land at its Skelton Grange site in Leeds to Microsoft for £107M. The tech company will build a hyperscale data centre on the site.
The deal will be payable in cash in two tranches linked to the phased completion of the sale for the two adjoining land parcels.
Plot 1 comprises 27 acres at £52.9M, with completion of the sale targeted for the second half of the year. Plot 2 comprises 21 acres, sold for approximately £53.2M, with completion of the sale targeted for H1 2026.
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Sable Capital has acquired a residential development delivered by O’Shea Group and Galliard Homes in Hackney Wick, using capital from its UK build-to-rent fund.
Sable has acquired the 176-apartment BTR development between Hackney Wick station and the Hertford Union canal. Known as Wickside, the development is set across 8.4 acres and comprises a series of courtyards and squares.
The scheme includes an art gallery, retail, canalside restaurants and bars, a foundry, coworking space and creative studios, plus a new bridge to Fish Island and a new accessway to Hackney Wick station.
The scheme will offer one-, two- and three-bedroom apartments, in addition to a range of duplexes and townhouses, and the first apartments are expected to be delivered in 2025.
FINANCE
Macquarie Asset Management has completed the final close of Macquarie Real Estate Partners, an opportunistic real estate fund with approximately $1.9B (£1.5B) of equity to deploy under a global strategy.
MREP is the second vehicle in Macquarie Asset Management Real Estate’s opportunistic fund series and is focused on predominantly developed markets.
To date, capital from MREP has been deployed across the logistics, living and new economy office sectors. This includes logistics warehousing groups Logistics Property Company in the U.S. and Unified Industrial in Asia-Pacific, rental housing platform Goodstone Living in the UK, European sustainable office developer Edge, and a partnership with U.S. self-storage specialist LaTerra Storage.
LEASES
Battersea Power Station has signed the first occupier at its Foster + Partners-designed 50 Electric Boulevard office building, with home technology company SharkNinja taking 32K SF to establish its new EMEA headquarters.
SharkNinja will start moving employees into the new headquarters this autumn, with up to 320 employees accommodated over two floors.
SharkNinja’s move to 50 Electric Boulevard adds to its presence at Battersea Power Station, having first agreed to 25K SF of office space inside the Grade II-listed building in 2022. It also has a brand and demonstration testing facility inside one of the railway arches on Arches Lane.
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Barings and joint venture partner and development manager LBS Properties have agreed to their first pre-letting at Tide Bankside in London.
The lease for the entire 13,900 SF third floor with Costello Medical is for 15 years, and Costello is expected to take occupancy shortly after the building completes in the summer, moving from its London office on Old Broad Street.
Tide comprises 11 upper floors providing approximately 134K SF of Grade A office space, along with a ground-floor retail unit and 11,500 SF of workspace on the lower ground, ground and first floors.
The asset was acquired by Barings on behalf of its second European real estate value-add fund, BREEVA II. Cushman & Wakefield, RX London and USP are letting agents on Tide.
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Fiera Real Estate UK and Cubex have completed a pre-letting at their Grade A 94K SF logistics scheme, Swindon Trade Park. The letting to Tile Mountain comprises more than 16K SF split across three units at the development.
Fiera and Cubex secured planning in 2023 for five new trade and two new urban warehouse units, with MCS Build appointed as the main contractor.
The site was purchased on behalf of Fiera Real Estate Opportunity Fund V UK, the fifth fund in Fiera’s £600M series, which completed its final close in February 2022 with £180M of equity committed.
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Flexible workspace provider Techspace is to launch a new location in Clerkenwell following a “significant acquisition” by Capreon, a private real estate investment firm that is part of Noé Group. The new location at 132 Goswell Road will provide space for 900 desks and more than 1,000 new members.
This partnership with Techspace marks Capreon’s first significant office space acquisition in London in 18 months.
A former gin distillery, the site was rated BREEAM Excellent in 2022 after undergoing a £35M redevelopment. The new workspace is set to open in October. Founded in 2012, Techspace has opened offices in London and Berlin, and the collaboration with Capreon will bring its member portfolio from 3,500 to more than 6,000 by the summer of 2025.
DEVELOPMENT
AXA IM Alts has appointed Multiplex to begin construction at its 650K SF Fifty Fenchurch Street workplace development in the City of London. This follows the completion of the enabling works in May by Keltbray, which will also carry out piling and excavation.
Construction will start this summer and is expected to complete in 2028. In addition to Multiplex, AXA IM Alts, together with YardNine as development delivery partner, will deliver the 36-storey building. Eric Parry Architects and Adamson Associates are working alongside Arup, which is leading the engineering design.
The development also includes the retention of the Medieval Tower of All Hallows Staining and Lambe’s Chapel Crypt, which will form part of the public realm being built alongside a new subterranean Livery Hall for The Clothworkers’ Company.
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Tellon Capital has appointed RED Construction Group to deliver its redevelopment at 40 Broadway, a modern office building in Westminster spanning more than 130K SF.
The redevelopment will offer a variety of Grade A office space from the basement to the eighth floor, together with a ground-floor café, roof terraces on the majority of floors and a communal roof terrace, Tellon Capital said.
Situated in the Broadway and Christchurch Gardens Conservation Area, the design of 40 Broadway will include a natural stone façade on the Broadway elevation.
