British Land has purchased a portfolio of seven retail parks for £441 million, enhancing its market position.
- The acquisition is funded from existing resources and an equity placement of approximately £300 million.
- These retail parks, acquired from Brookfield, boast a strong 99% occupation rate with a total rent income of £29.5 million.
- Chief Executive Simon Carter highlights the attractive yield and strong rental growth prospects from the acquisition.
- British Land expects an underlying profit of up to £144 million by September 30, with a slight increase in portfolio value.
British Land has strategically enhanced its retail portfolio by acquiring seven high-quality retail parks for a total of £441 million. This acquisition is a significant addition to the company’s extensive holdings, reinforcing its leadership position in the retail park sector.
The funding for this acquisition comes from British Land’s existing resources, supplemented by an equity placement of approximately £300 million. This financial strategy includes an accelerated bookbuild offering to achieve the necessary capital, as reported by City AM.
Acquired from Brookfield, the portfolio offers a robust net initial yield of 6.7 percent, reflecting the strong financial metrics of these assets. The retail parks maintain a near-full occupation rate of 99%, which is anchored by prominent superstores, enhancing their attractiveness to investors.
Among the notable retail locations included are Elliott’s Field Shopping Park in Rugby, Central Retail Park in Falkirk, and Wellington Retail Park in Waterlooville. These sites contribute to a total passing rent of £29.5 million, underscoring their income-generating capability.
Simon Carter, the Chief Executive, emphasizes the strategic value of this acquisition. “The acquisition of this high-quality portfolio builds upon our market-leading position in retail parks,” he stated. Carter further explained that these assets are expected to generate strong rental growth and deliver double-digit ungeared internal rates of return.
British Land’s trading update reveals expectations of an underlying profit between £142 million and £144 million for the six months leading up to September 30, matching the previous year’s results for the same period. This positive projection is supported by disciplined cost management and robust leasing activity.
The company’s strategic focus on retail parks is evidenced by a significant portfolio value increase of 5% in this category, contributing to a marginal overall rise of 0.2%. Earlier in the year, British Land engaged in asset acquisitions totaling £270 million and concluded disposals valued at £407 million.
The acquisition solidifies British Land’s dominance in the retail park sector, aligning with its strategic growth objectives.
