British Land has announced a major acquisition of premium retail parks, valued at £441 million.
- The acquisition includes seven retail parks with an impressive 99% occupancy rate, indicating high demand.
- Funding for this purchase will be secured through existing resources and an equity placing of approximately £300 million.
- Chief Executive Simon Carter highlights the strategic benefits and strong growth prospects of these assets.
- The company foresees a steady increase in portfolio value and enhanced profit performance for the first half of 2024.
British Land has confirmed the acquisition of a portfolio consisting of seven premium retail parks for a total consideration of £441 million. This strategic move was facilitated by deploying existing resources combined with an equity placing valued around £300 million, implemented through an accelerated bookbuild process. The seller, Canadian investment firm Brookfield, boasts a passing rent of £29.5 million with a net initial yield of 6.7%.
The retail parks, maintaining a remarkable 99% occupancy rate, are anchored by major superstores, ensuring strong footfall and consumer interest. Notable locations in the acquired portfolio include Elliott’s Field Shopping Park in Rugby, Central Retail Park in Falkirk, and Wellington Retail Park in Waterlooville.
Simon Carter, Chief Executive of British Land, elaborates on the acquisition’s strategic significance. He states, “The acquisition of this high quality portfolio builds upon our market leading position in retail parks.” Emphasising the financial advantages, Carter further notes, “These assets offer an attractive yield and strong rental growth prospects in line with our guidance of three per cent to five per cent…”
The timing of this acquisition coincides with a favourable trading update from British Land for the six-month period ending 30 September. The company projects underlying profits between £142 million and £144 million, consistent with performance in the first half of 2023. Notably, British Land anticipates a rise in portfolio value by 0.2%, driven predominantly by a five per cent increase in the value of retail parks.
This acquisition emphasises British Land’s focus on retail parks as a preferred format for retailers, underscoring their confidence in sustained rental growth and ungeared internal rates of return. Since April 2024, the company has directed £711 million towards this sector, reflecting its strategic importance within their broader investment agenda.
This acquisition reinforces British Land’s leadership in the retail park sector, aligning with its strategic goals and financial growth outlook.
