As pension, sovereign and private equity funds rush to invest in prime London real estate, Linklaters has picked up a major client as Australia’s largest pension fund purchased a 42% stake in the £5bn redevelopment of King’s Cross.
AustralianSuper, which Linklaters corporate partner Jessamy Gallagher won as a client early last year, selected the Magic Circle firm to advise on its £435m purchase of a 42% stake in the King’s Cross project (pictured). The development will transform a 67 acre site in central London into 2,000 homes, a hotel and a retail complex estimated to be worth £5bn on completion. It is one of the biggest city centre regeneration projects in Europe, with 10 new parks and squares, 20 new streets and three new bridges across Regent’s Canal.
Gallagher, alongside real estate partner Martin Elliott, advised AustralianSuper as it purchased the UK government’s 36.5% stake and German logistics group DHL’s 6% stake. The UK government has received £371m from the sale, with DHL’s stake estimated to be worth around £60m. The deal means AustralianSuper now has the majority stake in the project, with a 67% interest, following an initial acquisition in April 2015, which Linklaters also advised on.
With Australian pension funds replicating the UK real estate push carried out by their Canadian peers, Gallagher has been aggressive in the Australian market, resulting in Linklaters winning a spot on AustralianSuper’s inaugural European legal panel last year.
One of the other firms to win a place, Herbert Smith Freehills, acted on the other side of this deal for the UK government. Real estate partner Julian Pollock led the HSF team on the sale, with the firm having advised government subsidiary London and Continental Railways on King’s Cross Central for more than two decades.
Pollock said: ‘Whilst it feels like the end of an era, the firm is enormously proud of its involvement in a world class regeneration project such as King’s Cross Central, having seen and helped it evolve from a largely derelict site to a vibrant new neighbourhood.’