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Starwood said to be selling London Tower project on Brexit
[LONDON] Starwood Capital Group LLC is in talks to sell its interest in a planned London tower over concerns that Brexit will hurt demand for office space, three people familiar with the plan said.
Starwood, based in Greenwich, Connecticut, plans to dispose of its stake in the One Braham development in east London to venture partner Aldgate Developments for more than £60 million (S$105.98 million), the people said, asking not to be identified because the matter is private. Aldgate will probably seek a new partner before building the 18-storey tower, which will have space for about 3,650 workers, they said.
Spokesmen for Starwood and Aldgate Developments declined to comment.
More than 1,900 firms will probably review their office-space requirements following the Brexit vote, real estate researcher DealX said in July.
Properties that have short leases and need renovations may see their values fall further than those with longer rental contracts, Bloomberg Intelligence analyst Susan Munden said in a Dec 12 note One Braham was set to be the second office building developed by Starwood and its venture partner in Aldgate, an area on the eastern border of the City of London financial district that has become popular with technology companies.
The two firms built the Aldgate Tower and fully leased it to tenants including Uber Technologies Inc. before selling it to China Life Insurance Co and Brookfield Property Partners LP for £346 million in April.
Starwood may become a lender to the development after selling its equity stake, the people said, adding that no deal has been reached and negotiations are ongoing.
About four million square feet of space planned for development in the City of London now has an uncertain future due to Britain's departure from the European Union, broker GM Real Estate said in September.