Private-Equity Buyer in Talks for London Tower Site

(Bloomberg) -- A new real estate company backed by some of Israel’s richest families is in talks to buy a City of London site that could be the location of a new office tower, people familiar with the matter said.

In a sign of the appetite for development risk in London’s office market, Brockton Everlast Inc. is in exclusive talks to buy the Devonshire Quarter from Madison International Realty LLC, the people said, asking not to be named because the negotiations are private. The four-building estate is being sold for about 95 million pounds ($120 million) through broker CBRE Group Inc., they said.

Spokesmen for Madison, Brockton Everlast and CBRE declined to comment.

Competition to buy London buildings for redevelopment is intense despite Brexit. The vote to leave the European Union may even have helped as it slowed the rate of construction, potentially paving the way for a shortage of office space in the next few years. Land Securities Group Plc agreed to buy a plot earlier this month, after years of being cautious about development.

The potential buyer of the Devonshire Quarter site is backed by Tel Aviv-based Alony Hetz Properties & Investments Ltd., which is controlled by Chief Executive Officer Nathan Hetz and David Wertheim, part owner of Israel’s Coca-Cola franchise. Brockton Everlast is also co-owned and managed by the partners of London-based private-equity firm Brockton Capital LLP.

Alony Hetz announced plans to invest up to 340 million pounds in Brockton Everlast in February, aiming to buy buildings and development sites in Greater London. Brockton Capital was founded by former Blackstone Group LP and Merrill Lynch real estate specialists David Marks and Jason Blank in 2005.

The buildings on the London site could become vacant in 2023, and could be demolished to make way for a 23-story tower with about 430,000 square feet (40,000 square meters) of space, the sales brochure said. That’s close to the floor area of the nearby Gherkin skyscraper.

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