‘The government has announced the sale of its stake in the land around London’s King’s Cross station. The taxpayer’s 36.5% stake in the King’s Cross Central Partnership – the group developing the 27-hectare site – is expected to raise £360m for the Treasury.
Savills and Lazard have been appointed to advise the on the sale. The entire estate, which will encompass 5.8m sq ft of office space, apartments and shops, is likely to be worth more than £5bn when it is completed in 5 years’ time. DHL is also selling its 6% stake in the land.
We appreciate that there is a long and dishonourable tradition of the government selling off assets for rather less than they are worth. But at first glance it does strike us that if the entire estate is likely to be worth ‘more than £5bn when it is completed’, selling out a 36.5% stake now for £360m does not look like an investment decision likely to win any prizes for astuteness. We note that DHL is also selling its 6% stake in the land. We wager that they will achieve more than £60m for it and that they will pay significantly lower fees to achieve it.