American private equity barons circling Britain’s largest office developers after their share prices collapse by 50%
American private equity barons are circling Britain’s largest office developers after their share prices collapsed by almost 50 per cent.
City sources said Blackstone, the Wall Street-based giant led by Stephen Schwarzman, is rumoured to be monitoring companies including Land Securities.
Blackstone wants to strike cut-price deals such as joint ventures, stake purchases and takeovers, the sources said.
Collapse: Land Securities owns office blocks in the City of London, Canary Wharf (pictured) and the West End
Land Securities is the largest listed real estate investment trust in the FTSE100 index. It owns office blocks in the City of London, Canary Wharf and the West End.
Its shares have crashed from almost £10 earlier this year to close at £5.78 on Friday amid concern about the future for office working in the wake of Covid-19. A number of major firms have told their staff they need not return to the office full-time until 2021.
Blackstone has experience of picking up British commercial property on the cheap and making a quick profit.
After the financial crisis in 2009 Blackstone struck a deal with British Land to buy a stake in Broadgate, the 30-acre City of London office estate that houses Swiss bank UBS.
The American buyout house formed a joint venture with British Land for Broadgate, with its 50 per cent stake valued at around £1billion. Three and a half years later Blackstone sold its shareholding to Singapore-based sovereign wealth fund GIC for almost £1.7billion, meaning the American firm made around £700million.
Brookfield, the Canadian investment house that specialises in property deals, has already pounced on one well-known developer during the pandemic.
In June, it paid £264million for a 7 per cent stake in British Land, which last week was on the cusp of being demoted from the FTSE100 index.
Aside from Broadgate, British Land owns London office space at Regent’s Place and Paddington Central.
Brookfield, which has a market capitalisation of $52billion (£39billion, has a track record in carrying out major UK property deals.
In 2015, it teamed up with the Qatar Investment Authority to buy Songbird Estates, the owner of Canary Wharf, for £2.6billion.
British Land shares closed at £3.65 on Friday.
A spokesman for Blackstone declined to comment.