LONDON—AustralianSuper is taking a majority interest in the 67-acre King's Cross mixed-use mega-project here, as the British government sells off its stake. The government said Friday it had agreed to sell a 36.5% stake in King's Cross to the Australian pension fund for US$531 million; the sale will increase AustralianSuper's interest to 61.5%.

The initial deal for 25% in the project, announced last March, marked AustralianSuper's first direct investment in London and its second in the UK, while the latest transaction marks the UK government's exit from its investment in the eight-million-square-foot King's Cross development. For the government, it's part of a plan to pare down the country's debt by 2020 through asset sales.

This past August, the government and DHL Supply Chain announced that they would sell their combined 42% stake in King's Cross. The government's stake in King's Cross is held by its wholly-owned subsidiary, London & Continental Railways Ltd., which has overseen the development at King's Cross on its behalf for the past 20 years.

With 50 new and refurbished buildings, the project will have 26 acres of public space, including 10 new parks and squares, 20 new streets and three new bridges across the Regent's Canal. It will also have close to 2,000 homes. Tenants will include Google, which is establishing its UK headquarters there, the Aga Khan Development Network and University of the Arts London.

Lazard, as financial adviser, conducted the sale process, supported by real estate advisers Savills and legal advisers Herbert Smith Freehills. Argent, which is a co-investor via a partnership with Hermes, will remain as developer and asset manager at King's Cross, focused on the design and delivery of the next phases of development.