Blackstone sells London waterfront advanced to Singaporean group for £395mn

Blackstone has offered a £395mn waterfront workplace advanced close to the Tower of London to a Singaporean investor, who stated turmoil within the UK had created a shopping for alternative.

St Katharine Docks, a posh of workplace buildings, retail house and a 185-berth marina to the east of the Metropolis of London, has been acquired by Metropolis Developments Ltd, the Singapore-based property group led by billionaire Kwek Leng Beng.

The transaction comes at a troublesome time for business property buyers. Rising rates of interest have knocked actual property valuations, and a few property funds run by a number of main buyers, together with Blackstone, have restricted withdrawals as buyers pull out.

The UK has been significantly onerous hit within the wake of final yr’s “mini” Funds, which led to a pointy rise in rates of interest and knocked buyers’ confidence in Britain.

“The present uncertainty within the UK has offered us with strategic alternatives to accumulate prime belongings and broaden our portfolio,” stated Sherman Kwek, Metropolis Developments’ chief government. He stated the corporate is assured within the UK’s long-term financial prospects.

The pound hit a file low in opposition to the US greenback within the aftermath of the “mini” Funds in September. It has since recovered from these depths however stays 9 per cent decrease in opposition to the greenback yr on yr, making UK belongings higher worth for dollar-based worldwide buyers.

Zachary Gauge, head of actual property analysis at UBS asset administration, stated that after a pointy fall in valuations on the finish of final yr, UK property now “seems attractively priced versus different world markets”.

Blackstone stated international buyers had been quickly postpone by the turmoil, however pent up demand and cheaper costs for sterling belongings may reel in patrons this yr. “When I’m speaking to buyers out of Asia, my perspective is that they see a lovely entry level into sterling,” stated James Seppala, Blackstone’s European head of actual property.

“My sense is that world capital may need been on pause throughout some portion of quarter 4, however that hiatus may effectively result in a rebound in exercise over the course of 2023,” he added.

The 23-acre advanced close to the foot of Tower Bridge, which takes its identify from a Twelfth-century hospital constructed on the location, was the prize asset of Nick Leslau’s Max Property Group, which Blackstone acquired and took personal in 2014. It spans 451,000 sq ft of workplace house let to tenants together with WeWork and Northeastern College and attracts practically 6mn guests annually.

Blackstone estimated it paid about £300mn to purchase St Katharine Docks as a part of the broader deal for Max’s portfolio. It types a part of its fourth Blackstone Actual Property Companions Europe fund, which raised €6.7bn from institutional buyers in 2013.

Blackstone is without doubt one of the world’s largest actual property buyers with a worldwide portfolio value $577bn and roughly €120bn in Europe, of which 13 per cent is made up of places of work.

The deal takes Metropolis Developments’ UK portfolio to greater than £1bn. It owns two different workplace buildings within the capital.