Agreement for Leases and Asset Substitution
02 Agosto 2010 - 8:00AM
UK Regulatory
TIDM85QT
RNS Number : 3138Q
Broadgate Financing PLC
02 August 2010
02 August, 2010
Broadgate Financing PLC: Substitution of Assets in Broadgate Financing PLC and
Bluebutton Properties Limited Agreement to Develop New UBS Building at Broadgate
Bluebutton Properties Limited has signed an agreement for leases with UBS to
develop a new 700,000 sq ft building on the Broadgate Estate. As a result of
this, Bluebutton Properties, advised by Eurohypo AG, has completed a
substitution of assets within the Broadgate Financing PLC securitisation. The
properties subject to redevelopment 3, 4 & 6 Broadgate, have been removed from
the securitisation and replaced with two high quality recently constructed
properties, 201 Bishopsgate and Broadgate Tower.
Securitisation transaction highlights:
- Substitution of 201 Bishopsgate and Broadgate Tower for 3, 4 & 6 Broadgate
and GBP226 million of cash collateral.
- Substitution represents a significant net equity injection to the
securitisation of GBP229 million by Bluebutton Properties.
- Secures UBS as a long-term anchor tenant on the wider Broadgate Estate
- Extensions of existing UBS lease agreements at 100 Liverpool Street and 1-2
Finsbury Avenue generating additional contracted income of up to GBP68 million
and increasing market value of properties.
- Weighted average lease length to first break extended by 1.9 years.
- New properties substituted are likely to have a higher residual value than
amortising cash collateral.
- Scope for income growth through rent reviews and letting of vacant space in
the new buildings.
- Significant reduction in future capital expenditure requirements by removal
of older properties.
- Rating agency confirmation that the substitution will not adversely impact
the current ratings of the securitisation.
Transaction details:
- The substitution comprises the removal of 3, 4 & 6 Broadgate (including
associated Henderson and AMBAC cash surrender collateral - GBP11 million) and
the cash deposit of GBP215 million charged as security following the disposal of
the Willis Building.
- 201 Bishopsgate and Broadgate Tower have been substituted into the
securitisation. Both properties were constructed in 2008 and provide 816,000 sq
ft of lettable area with a combined valuation of GBP565 million as at March
2010.
- 201 Bishopsgate comprises 419,000 sq ft. It is 97% occupied with annual
current contracted rent of GBP19.9 million and passing rent of GBP11.5 million
due to rent free periods. The weighted average lease length to first break is
16.2 years. Major tenants include Mayer Brown, Henderson, Landesbank
Baden-Wurttemberg and Bank of Nova Scotia. As at March 2010, 201 Bishopsgate
was valued at GBP310 million.
- Broadgate Tower comprises 397,000 sq ft. It is 73% occupied with annual
current contracted rent of GBP13.5 million; due to rent free periods the passing
rent is GBPnil. The weighted average lease length to first break is 11.3 years.
Major tenants include Reed Smith LLP, Gill Jennings, Dickson Minto, Itochu,
Greenlight, Liquidnet Europe and Regus. As at March 2010, Broadgate Tower was
valued at GBP255 million.
- UBS has agreed to extend lease break options on 755,000 sq ft of space they
currently occupy (comprising 1-2 Finsbury Avenue, 8-12 Broadgate and 100
Liverpool Street) by an average of 24 months. The lease extensions, which are
subject to planning consent for the new development being obtained, will
generate additional contracted income of GBP68 million over the 24 month period.
If planning consent is not obtained, the additional contracted rental income
from lease extensions will be no less than GBP32 million.
The Substitution demonstrates Bluebutton's continued strong commitment to the
transaction and active management of the Broadgate Estate to the benefit of
Bondholders.
Enquiries
British Land
Simon Carter 020 7467 3492
Sally Jones 020 7467 2942
Notes to Editors
Bluebutton Properties Ltd
Bluebutton Properties was established in 2009, and is a 50:50 joint venture
between British Land and Blackstone funds. Bluebutton Properties is the parent
company of the group which owns the Broadgate Estate, one of the premier City of
London office estates, consisting of 16 buildings covering 4.4 million sq ft of
Grade A office, retail and leisure space.
Broadgate Financing PLC
In March 2005, Broadgate Financing PLC, then a newly established ring fenced
subsidiary of British Land issued GBP2.08 billion of Bonds supported by the cash
flows from certain properties within the Broadgate Estate in the City of London.
The properties currently securitised are: 1, 2 and 3 Finsbury Avenue; 1 and 2
Broadgate and Broadgate Circle; 8-12 Broadgate and 100 Liverpool Street; 135,
155 and 199 Bishopsgate; Exchange House; 10 Exchange Square; 1 Appold Street;
Broadwalk House; the Broadgate Club; 201 Bishopsgate and Broadgate Tower.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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