Blackstone in pole position for €970m London office

Blackstone is close to buying One and Two Southbank Place in London from developer Almacantar, according to media reports that suggest the private equity giant is ready to pay the asset's £875 mln (€970 mln) asking price.

The property, which launched last year, is home to the London headquarters of Shell and is also the site of what WeWork has called 'the largest co-working space in the world', with some 6,000 desks. Both tenants have inked 20-year leases.

Almacantar spent over £550 mln acquiring the project in a forward-purchase deal in 2015, and went close to selling the scheme last year to Singapore's Bright Ruby.

However, the deal collapsed amidst Brexit worries in September, with Almacantar also apparently rowing back on cancelling an expensive debt deal with Legal & General Investment Manangement (LGIM) that was tied to the scheme. LGIM had refinanced the project in February 2019 to the tune of £420 mln.

The two buildings represent the office part of the 1.5 mln ft2 (139,354 m2) mixed-use scheme near Waterloo being realised by Canary Wharf Group and Qatari Diar.

Nearly a year ago, Almacantar revealed that it was putting the asset on the market with a £875 mln price tag, representing a 3.89% yield. Sources at the time said that the firm was looking to capitalise on market dynamics.

According to the reports, although the deal has not yet closed, Almacantar is understood to have ceased marketing the asset.

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