* Business * British Land British Land to sell half of Broadgate stake to Blackstone

• Broadgate site valued at £2.13bn, down from last year
• Sale places British Land 'in a very strong position' to invest



Broadgate Centre, London. Half of British Land's prime site is to be sold to US private equity firm Blackstone. Photograph: Barry Lewis/Corbis

British Land has secured a £1bn deal to sell a 50% stake in its Broadgate complex to US private equity firm Blackstone.

The two companies are forming a joint venture in which each will own half of the 30-acre site near Liverpool Street train station, following weeks of negotiations.

Broadgate is British Land's largest single asset and one of its most prestigious, situated in the heart of the City. The move cuts British Land's exposure to the financial sector, at a time when rents have come under severe pressure from the recession. It also gives the company more muscle to acquire new property assets.

In a statement, the company said the deal "realises our strategic objective of reducing exposure to large single asset concentrations. It puts British Land in a very strong position ... allowing it to take maximum advantage of market opportunities as the cycle develops." The company is the UK's second largest property firm.

Having fallen sharply during the economic downturn, there is now optimism that property values have stabilised. Prudential's director of investment, John Betteridge, said yesterday that prices are starting to increase.

Work on Broadgate began in 1984, two years before the so-called Big Bang shook up the City. Its main tenants are UBS, Royal Bank of Scotland and law firm Herbert Smith, with Deutsche Bank, Henderson, Reed Smith, Mayer Brown and ICAP all also operating from the site.

The deal values Broadgate at £2.13bn, slightly less than the £2.195bn valuation British Land put on the site last month. A year ago the site was valued at £2.845bn. Under the deal, Blackstone will take on £987m of debt – half the total and pay £77m cash.

British Land had admitted a month ago that it had received several expressions of interest in the site. Shares in the company slid by 1.1% this morning to 505p.

Chris Grigg, chief executive of British Land, said the Broadgate deal was the climax of his strategy to cut the company's exposure to large single assets.

"The transaction increases our capacity for profitable investment opportunities elsewhere as we reinvest in more diversified, liquid assets. We have selected Blackstone as a valued partner with excellent financial strength and real estate capabilities," said Grigg, who joined the company in January.