Qatar-based developer and investor Barwa Real Estate has acquired Park House development in London from the U.K.'s landlord and developer Land Securities Group for almost $370 million - Dow Jones is reporting.
Park House, at 453/497 Oxford Street, is a development of 330,000 square feet comprising 163,000 square feet of offices, 88,000 square feet of retail space and 70,000 square feet of residential accommodation. The acquisition is the first major wholly owned investment made by Barwa in the U.K.
Barwa will pay almost $333 million immediately and around $37 million on practical completion. It will meet all of the construction costs and pay Land Securities a share of the profit within 12 months of practical completion which is estimated at around $49 million.
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The U.K.'s largest landlord and developer Land Securities Group PLC (LAND.LN) Thursday said it sold its Park House development in London to Qatar-based international developer and investor Barwa Real Estate Co. (BRES.DO) for GBP250 million.
Barwa will pay GBP225 million immediately and GBP25 million on practical completion to buy the site, and it will meet all of the construction costs and pay Land Securities a share of the profit.
Construction started in May and completion is due in November 2012. Land Securities will act as development manager responsible for delivery of the project.
Barwa will pay a profit share within 12 months of practical completion. Based on current expectations for office and retail rental values, this profit share is estimated at about GBP33 million and is capped at GBP50 million.
"Park House is the largest speculative development in Mayfair for a generation and this sale enables us to realize the majority of our profit ahead of schedule, with significantly reduced risk and with no capital employed," said Robert Noel, managing director of Land Securities' London portfolio.
Land Securities plans to invest the capital into its growing speculative development pipeline.
Park House, at 453/497 Oxford Street, is a development of 330,000 square feet comprising 163,000 square feet of offices, 88,000 square feet of retail space and 70,000 square feet of residential accommodation.
The acquisition is the first major wholly owned investment made by Barwa in the U.K. and fits with Barwa's strategy to invest in international commercial property, the company said.
"The investment demonstrates our commitment to Europe as part of our growth strategy and signals our interest in strengthening our portfolio interests in London," said Ghanim bin Saad Al Saad, chairman and managing director of Barwa.
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