October 15, 2012 8:05 pm

Great Portland cuts stake in City project

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Great Portland Estates, the property developer, has sold three-quarters of its 50 per cent stake in a City of London skyscraper, as it pulls out of the Square Mile to focus on its core market around the West End.

The London-based company said on Monday that it had sold the 37 per cent stake in 100 Bishopsgate to Brookfield, the Canadian office and shopping mall developer that already owns a half share of the project, for £63m.

The 40-storey office block is one of five skyscrapers being built in small cluster around Liverpool Street station. However, work on the building has been held back until the two companies are able to secure a tenant.

Toby Courtauld, GPE’s chief executive, said the company had worked hard with Brookfield to get the site ready so that work could commence as soon as a tenant had been found.

“Now that these preparatory works are complete, the time is right for us to reduce our holding,” Mr Courtauld added.

GPE is working on a number of development projects in the West End, including the rebuilding of the former Royal Mail depot at Rathbone Place and a 60,000 sq ft office and residential development in Hanover Square.

Dennis Friedrich, chief executive of Brookfield Office Properties, said his company believed in the “long-term outlook for London as a flourishing centre of commerce, as indicated by this transaction and other recent investments we’ve made in the City”.

Brookfield, which is the largest owner of offices by volume in the US, is involved in three of the five skyscrapers under construction in the City. As well as 100 Bishopsgate, the group is a shareholder in Canary Wharf Group, which has a stake in 20 Fenchurch Street, often referred to as the “Walkie-Talkie” tower, and construction manager on the nearby Pinnacle, also known as the “Helter-Skelter” building for its corkscrew design.

The City of London, which is at the centre of the capital’s boom in office construction, is seeing a revival in demand for new space, underpinned by growth in the insurance and technology, media and telecommunications (TMT) sectors.

TMT companies took up 731,000 sq ft of new space in the City during the first half of this year, compared with 367,000 sq ft for the same period last year, according to Knight Frank, the property services group. They accounted for more than a quarter of all new City leases signed during the first half of the year.

Shares in Great Portland rose 1.6 per cent to close at 453½p on Monday.

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