Helical Bar has bought out joint venture partner Crosstree Real Estate on its mixed-use Bower development at Old Street, EC1, in a deal that values the campus at £248m.
Under the terms of the deal Helical will become sole owner of 207 Old Street and 211 Old Street but will sell its interest in the retail parade at 183-213 Old Street to Crosstree for £23m.
The now disbanded joint venture has already sold its interest in the Empire House element of the campus to Standard Life Investments’ Long Lease Fund for £20.7m.
The net payment to Crosstree by Helical is £76m, plus the refinancing of the existing external debt of £88m.
Helical will fund the acquisition though existing cash resources of £18m and new bank finance of £200m, £146m of which will be drawn down to complete the purchase, with £54m available to fund the redevelopment of 207 Old Street.
The company’s existing equity share plus profits to date on the 150,700 sq ft of completed development will remain invested in the scheme.
The second phase of the scheme will provide 170,000 sq ft of offices and 7,300 sq ft of retail and restaurant space.
In total the campus occupies a 3.12-acre site.
Phase one of the scheme at 211 Old Street is comprised of the Warehouse and the studio, which is now 92% let, generating £7.2m pa.
The tower at 207 Old Street is the second phase and work is due to commence imminently.
The £70m of construction work is due to complete by the end of 2017.
Gerald Kaye, Helical’s development director, said: “We acquired the Bower, in joint venture with Crosstree, at a time when the renaissance of the Old Street quarter was in its early days, and have seen the area transformed over the last three years, supported in part by the achievements we have made at the scheme to date.
“We have been seeking to increase our investment holdings in London for some time as well as to retain ongoing development exposure.”
