August 17, 2015 / 6:26 AM / 4 years ago

Government to sell stake in King's Cross redevelopment project

LONDON (Reuters) - The British government has fired the starting gun on a plan to sell its stake in Europe’s largest city-centre redevelopment project around London’s King’s Cross station, in its latest disposal aimed at boosting state coffers.

Passengers walk along a platform at King's Cross station in London January 2, 2015. Rail fares rose on Friday by an average of 2.2% in England and Wales. REUTERS/Paul Hackett

Britain’s Department of Transport said the sale of its 36.5 percent stake in the 67-acre King’s Cross Central Limited Partnership site, currently being turned into offices and residential properties, would be a multi-million pound deal, with all proceeds going to the Treasury.

“By selling the government’s shares in King’s Cross Central we are selling an asset we no longer need to keep and realising its value for the taxpayer. The sale will help reduce the deficit,” Transport Minister Robert Goodwill said in a statement on Monday.

The sale, first announced by the Chancellor George Osborne in June, will be handled by Lazard and real estate advisory firm Savills (SVS.L).

Logistics provider DHL is also selling off its 6 percent stake in the project. The total project has an estimated potential end value in excess of 5 billion pounds ($7.8 billion), Savills said in a statement.

Other shareholders include Australian pension provider AustralianSuper, which holds a 25 percent stake, and Argent King’s Cross, the estate’s asset manager working alongside Hermes Investment Management, which owns a 32.5 percent stake.

Britain is raising money by selling off publicly owned assets to pay down its national debt and help rebalance the country’s books. Earlier this year it sold its 40 percent stake in the Eurostar rail link.

The government has already raised more than 16 billion pounds from the sale of shares in state-supported lenders Lloyds Banking Group (LLOY.L) and Royal Bank of Scotland (RBS.L).

($1 = 0.6382 pounds)

($1 = 0.6399 pounds)

Reporting by Sarah Young and Sinead Cruise; editing by Simon Jessop and Keith Weir

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