British Lands and GIC are selling half of the Citadel’s new city tower to Abu Dhabi’s Modon

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British GIC in Singapore has sold half of the Citadel’s new City of London office tower, currently under construction in Broadgate, to Abu Dhabi’s Modon Holding.

A deal to bring a new investor into 2 Finsbury Avenue, which represents a prior third of Ken Griffin’s fort Due for completion in 2027, it was highly anticipated as a sign of growing international investor confidence in the top end of the London office market, despite concerns about post-delivery demand.

MODON is an Abu Dhabi-listed real estate group backed by sovereign wealth fund ADQ and International Holding Company, headed by Sheikh Tahin bin Zayed Al Nahyan, one of the most powerful men in the UAE.

British Lands chief executive Simon Carter said the deal was “a vote of confidence for both Broadgate and the city”.

British Land and FTSE 100 UK builder, GIC, will each retain 25 per cent ownership of the tower through its Broadgate joint venture.

The willingness of a sovereign-backed international investor to bet on a city office development is a positive sign for the market after a brutal two-year decline.

Investment in London offices in the first three quarters of 2024 was the lowest since 2003, according to MSCI, with little investor interest in large blocks. Blackstone’s bid is about £300 million to acquire “Pork can” skyscraper It was seen as a positive sign, but the deal with vendor Nuveen fell through over the past year.

Mudon CEO Bill O’Regan said: “The quality and leasing potential of 2 Finsbury Street combined with the experience and reputation of our partners, has made this a compelling entry for Mudon into the London property market.”

Finsbury Avenue will consist of two towers of 21 and 36 storeys, linked by a 12-storey podium. It represents a major expansion of the Broadgate campus in the City of London, which is already home to UBS.

Financial terms of the sale were not disclosed Friday. British Lands estimates the development at £310 million in September 2024, with £628 million of costs still to come before the project is completed.

Citadel Ken Griffin’s Ended Fund and its sister company, market maker Citadel Securities, agreed to let 250,000 square feet last spring, marking a two-thirds expansion of Citadel’s London office space. The deal includes an option for the US company to increase the lease to half of the building.

Britain said the deal represented a record rent for the City of London at the time. The owner later launched a search for a new investor, saying he wanted a partner to share the “risk and cost” of the project and free up capital for its other developments.

Many developers have slammed the brakes on new flagship office projects in recent years, as construction and financing costs have risen, office values ​​have faltered and investors are concerned about the impact of home-working on office demand.

These factors resulted in a limited supply of quality buildings to the market, allowing landlords to increase rents.

Carter said he expects “a significant imbalance between demand and supply for new and significantly renovated space, especially in the city, resulting in strong rental growth at the upper end of the market.”

CBRE and Knight Frank advised British Land and GIC. Cushman is represented by Wakefield Mudon.