2 April 2016 – by David Hatcher
Broadcasting giant Sky has put its west London headquarters and studios up for sale for £545m.
It has appointed BNP Paribas Real Estate to market its 695,351 sq ft campus on Grant Way in Osterley, Hounslow.
The company intends to lease the campus back on a 30-year deal at an initial rent of £23.9m per year. The asking price reflects a yield of 4.1%.
As well as being Sky’s main office location, its sports and news programming is filmed on the site.
Sky is looking to reinvest the money it has spent on developing the campus into core areas of its business rather than having the funds tied up in real estate.
The broadcaster, which has a market cap of £17.5bn, could also use the proceeds to pay down some of its £7.7bn of gross debt.
The opportunity is one of the largest available in the UK and has been launched amid general caution in the market ahead of the 23 June in/out European Union referendum.
However, Sky anticipates the long-term income opportunity has the credentials to attract interest irrespective of the outcome of the vote.
Rupert Murdoch, Sky’s founder, major shareholder and father of chairman James Murdoch, is also well known for his anti-EU views.
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Early-stage discussions have begun with investors and a targeted completion for the sale has been set for the end of June. Sky has a BBB investment-grade credit rating and as a result the sale is expected to attract interest from investors that need to match annuity liabilities from the UK, the Far East, Middle East, Australia and North America.
Sky has 7,500 employees working across four buildings at the Osterley campus, ranging from 27,000 sq ft to 294,000 sq ft. The sale also includes the UK’s largest corporate gym, which is in a separate 21,000 sq ft building.
The company intends to put in place a lease with no minimum annual rental uplifts, but maximum RPI-linked uplifts of 4%.
The final phases of the campus were completed this year. Its development began in 2011, initially with Stanhope as development manager.
However, later stages were undertaken under the supervision of an in-house team led by programme director John Nicholson, who was previously responsible for the development of the 2012 Olympic village at the Olympic Development Authority.
BNP PRE’s appointment is understood to have come about through a corporate relationship with Sky, with its French banking parent one of the company’s lenders.
Sky initially considered a sale of the campus in 2012 when it was less than half its present size, but ultimately decided to retain ownership.
A BNP PRE spokesman declined to comment other than to confirm the company had been instructed on the sale.
Sky declined to comment.