Barclays Bank has started to outsource its estate in a £45m deal with Land Securities Trillium.
The deal involves the transfer of 340,000 sq ft of Barclay’s property to LST. The bulk – more than 200,000 sq ft – is surplus and vacant property in London and the South.
Barclays will make a capped payment -believed to be around £20m – to LST to reflect the letting risk attached to the short leaseholds at 13 surplus properties.
The balance of the deal is made up of Westwood Business Park, Coventry, where Barclays will continue to occupy 120,000 sq ft in three buildings. They have been leased back to Barclays by LST for 20 years.
LST is believed to be paying around £25m for the office park.
LandSec already has a close relationship with Barclays. In September the bank, together with Citigroup and Lloyds Bank, agreed to underwrite a £1.5bn bank facility for the company as part of a refinancing agreement.
“As with all of our major relationships, we’ve had discussions to see if we could help with their real estate needs,” said LST’s business development director Mark Norris.
There was no bid process, and the deal was agreed in nine months “from a standing start”.
Norris added: “Obviously Barclays is a client that has a much larger interest in real estate. Ideally, there is more that could be done. This transaction doesn’t deal with all of their surplus property.”
The deal comes six months after Barclays appointed Jones Lang LaSalle to review its 22m sq ft global portfolio (5 June 2004, p31).
LST was advised by Nelson Bakewell; Barclays by Jones Lang LaSalle and ATIS REAL Weatheralls.
● Bids were due in on Thursday for a Royal Bank of Scotland property outsourcing. RBS is expected to sell a mixture of surplus and operational sites from its portfolio of 3,000 properties.
