British Land, Blackstone sign up UBS at Broadgate

LONDON: British Land and joint venture partner Blackstone confirmed plans on Monday to develop a new 700,000 sq ft UK headquarters for UBS at the Broadgate Estate in the City of London.

The banks agreed to rent the bespoke-built property, to be developed on the existing site of 4 and 6 Broadgate, at a headline rent of 54.50 pounds (RM272) psf on a weighted average lease of around 18 years.

The rents are subject to annual increases in line with retail price inflation, within a range of 0% - 4%. The bank has also secured an 18-month rent-free period.

Excluding land and interest costs, British Land and Blackstone have estimated development costs of around 340 million pounds for the project and aim to begin construction in mid-2011.

Chris Grigg, chief executive of British Land, said the transaction demonstrated the "enduring appeal" of Broadgate while generating an attractive development return for shareholders.

Today's announcement ends months of speculation over the future of UBS's home in the City of London as its large leases at Broadgate edged nearer to expiry.

UBS is now the largest tenant in Broadgate, occupying wholly or in part five buildings on the estate covering just over 1 million square feet of office space. -- Reuters