July 5, 2013 / 8:47 AM / in 5 years

UPDATE 1-British Land buys London site in bet on new rail line

LONDON, July 5 (Reuters) - Property developer British Land bought the majority of a west London office complex for 470 million pounds ($708 million) in a bet the capital’s Crossrail east-west train line, due to open in 2018, will boost real estate prices.

Britain’s second-largest listed developer bought offices, shops, a hotel and development sites from insurer Aviva at the PaddingtonCentral scheme at a rental yield that will grow to 6.2 percent, it said on Friday.

“PaddingtonCentral is one of London’s most important transport interchanges (and) that’s only going to increase in importance with Crossrail,” British Land Chief Executive Chris Grigg told Reuters, referring to a planned nearby station.

The 15 billion-pound commuter line will slash journey times and connect Heathrow airport in the west to the Canary Wharf financial district in the east. Property prices could be lifted between five and ten percent within 200 metres of a Crossrail station, JPMorgan analysts said in September.

British Land shares were up 1.9 percent at 0830 GMT, outperforming a benchmark real estate index, which was up 0.6 percent.

In another deal boosted by the proximity of a Crossrail station in the Tottenham Court Road shopping district, plans to revamp and convert the Center Point tower into flats were granted planning permission on Thursday.

“With Crossrail’s arrival, there is growing impetus behind the drive to revitalise this part of London and Centre Point has to be at the forefront of that,” said Mike Hussey, chief executive of developer Almacantar.

In March, British Land raised almost 1 billion pounds for new investments via a share placement and sale of an office block in the City of London financial district, where it is one of the parties behind the so-called Cheesegrater skyscraper.

PaddingtonCentral, which takes the total invested to 750 million pounds, houses firms including AstraZeneca and Nokia, and helps British Land tip the balance of its portfolio further away from the City financial district, where tenant demand is patchier. It co-owns the City’s largest office complex, Broadgate, with Blackstone

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