The Singapore sovereign wealth fund is reported to be buying half of the Broadgate office estate in the City of London for £1.7bn in what is set to be the largest single property deal in UK real-estate history. The seller is
Its return to the market four years later is emblematic of the recovery of central London real estate since the financial crisis. Even after capital expenditure on a new office for UBS, Blackstone's highly geared equity investment is said to have ballooned by a multiple of four.
But the deal may also mark a shift in some investors' focus away from the safe haven of prime central London towards more distressed markets in the UK regions and continental Europe. Blackstone continues to pick up offices in London, but it is also rumoured to be buying the St Enoch shopping centre in Glasgow for £190m - more than the initial asking price but still a steep discount to its boom-time value and less than replacement cost, reckons Simon Blake, UK head of capital markets at property broker CBRE.
Investor appetite is also returning for offices in the big regional cities. Robert Boag, manager of the £825m
Our March cover feature 'Tired of London?', in which we argued that investors should give their property portfolios a regional skew after years of ouperformance in the capital, proved prescient. The seven shares we identified in that issue -