British Land Co. is preparing to sell its 50 percent stake in the London tower known as the Cheesegrater, people familiar with the matter said.
The real estate investment trust values its holding in The Leadenhall Building in the City of London financial district at about 500 million pounds ($620 million), said one of the people, asking not to be identified because the matter is private. The skyscraper, where record rents for the district of more than 100 pounds a square foot were achieved, is owned by British Land and Oxford Properties Group Inc.
British Land declined to comment. Insurance broker Aon Corp. and Amlin Plc are among the building’s occupants.
Office values in the City of London fell the most in at least seven years in July after Britain voted to leave the European Union. The Brexit referendum result is already forcing landlords to offer longer rent-free periods to attract occupiers and will cause rents in the City and docklands to drop as much as 12 percent over the next two years, according to broker Carter Jonas.
The disposal is in line with British Land’s strategy to sell fully leased individual buildings that are not part of its main London office campuses, which include the Broadgate complex. The money raised will be used to finance the construction of an office building next to Liverpool Street railway station, one of the people said. The property is adjacent to the new station for Crossrail, a rail line linking Heathrow Airport to Canary Wharf.
The decision to commit to redeveloping 100 Liverpool Street, one of several buildings being vacated by UBS Group AG as it moves into new headquarters, follows Axa SA’s real estate unit’s decision to proceed with the construction of what will be the tallest tower in the City of London district.
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