British Land has agreed to sell the third-party portfolio of its management company, Broadgate Estates, to Savills, as it seeks to focus on strengthening its own assets and brand.
Broadgate Estates manages 83 office, retail and residential assets across the UK, providing estate and facilities management services. Its remit includes looking after major assets not owned by BL including London schemes the 2,818-home East Village, the 67-acre King’s Cross regeneration project, as well as Grosvenor’s Liverpool One shopping centre (pictured).
The deal will see the 28 assets in London and Liverpool that BL doesn’t own, along with 160 of Broadgate Estates’ 500 staff, transferred to Savills.
Future role not determined
The future role of Broadgate Estates chief executive Steve Whyman has not yet been determined and BL did not say how many staff moving across were at director level.
However, the existing delineation of teams working on the third-party assets is expected to make the transfer relatively straightforward.
The transferred team will be based in Savills’ central London offices.
Broadgate Estates in numbers:
1968: year founded
83: total assets (of which 28 are not owned by BL)
500: staff (of which 160 will move to Savills)
£1.8m: operating profits for year ending March 2017
£10.9m: value of net assets
BL chief executive Chris Grigg said the sale was “a strategic decision, really around what we’re trying to do with the underlying business, focusing on campuses and the mixed-use quality of our business.”
Broadgate Estates’ most recent financial results for the year ending March 2017 showed it had operating profits of £1.8m and £10.9m of net assets.
BL hopes to improve the management of its own assets as a result of the deal, focusing on its stated strategy of creating “Places People Prefer” with increasingly mixed-use campuses providing an integrated landlord and property management service, offering services from fit out, and flexible leases to public events and public realm improvements.
Decision due on branding
Grigg said the company was due to make a decision “relatively quickly” about whether to continue to use the Broadgate Estates branding, which wasn’t sold as part of the deal.
“It’s still open to debate here,” he said. “We think brand is important. You’ll have seen how we are trying to think carefully about brand in terms of property as a service, so we will comment on it when we can.”
For Savills, the deal will see it bolster its property management operation, which covers 360m sq ft in the UK, and will add a roster of Broadgate Estates’ high-profile developer clients including Stanhope, Delancey, the Mitsubishi Estate, Oxford Properties, Grosvenor, Argent and AXA Investment Managers.
Mark Ridley, deputy global chief executive of Savills, said part of the appeal for buying the business, in addition to the recurring income offered by project management, was the “quality of the people” in the Broadgate Estates team. He think they will have “great careers” in Savills.
He added: “Most important of all, it’s about the clients and we will ensure clients managed through the Broadgate Estates business will have the best level of service we can provide using our extended platform.
“Project management is a core focus for us and we want to be the best in class.”
From the third-party portfolio
■ King’s Cross, NW1 – 67-acre regeneration project led by King’s Cross Central General Limited Partnership
■ Here East, Queen Elizabeth Park – 1.2m sq ft mixed-use campus in east London
■ Liverpool One – Grosvenor Liverpool Fund’s 1.6m sq ft Liverpool city centre retail-led scheme
■ London Bridge City, SE1 – St Martins Property Investments’ campus that includes More London, No 1 London Bridge and Cottons Centre, Hay’s Galleria along with shops and public realm that includes a 1,000-seat open-air amphitheatre
■ East Village, E20 – former Athletes’ Village of the London 2012 Olympic and Paralympic Games comprising 2,818 privately rented homes managed on behalf of East Village Management
■ 110 Fetter Lane, EC4 – Legal & General Pensions’ 270,000 sq ft office-let scheme in the City
■ 30 North Colonnade, E14 – KPMG’s 330,000 sq ft Canary Wharf office
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