British Land has finalised the purchase of seven prime retail parks for £441 million, enhancing its portfolio.
- The acquisition will be funded by current resources and a £300 million equity placement through accelerated bookbuild.
- The retail parks, with a 99% occupancy rate, promise a net initial yield of 6.7% with significant growth prospects.
- British Land’s recent financial update projects minor increases in portfolio values with continued rental growth.
- The strategic acquisition underlines British Land’s leadership in the retail park sector.
British Land has secured a portfolio of seven premier retail parks for a total of £441 million. This significant acquisition reiterates British Land’s commitment to strengthening its market presence in retail assets. The company plans to finance this transaction using its existing resources along with an equity placement of approximately £300 million, which will be conducted via an accelerated bookbuild process.
This newly acquired portfolio, previously held by the Canadian investment firm Brookfield, has an excellent occupancy rate of 99% and generates a passing rent of £29.5 million. The assets boast a promising net initial yield of 6.7%, underscoring their potential for substantial returns. Each site is anchored by a major superstore, a key factor in maintaining such high occupancy rates. Notable locations in the 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, remarked on the acquisition’s strategic merit, stating: “The acquisition of this high-quality portfolio builds upon our market-leading position in retail parks. Parks remain the preferred format for retailers, and we have deployed £711 million of capital into this subsector since 1 April 2024.” He emphasised the financial benefits by highlighting the assets’ attractive yield and rental growth potential, aligned with their guidance of three to five per cent.
Carter further noted that the assets are expected to be immediately earnings accretive, forecasting double-digit ungeared internal rates of return. The broader business scenario for British Land remains positive, with a high level of leasing activity and strict cost controls, which bolster its profit performance. The company anticipates announcing underlying profits in the range of £142 million to £144 million for the six-month period ending 30 September, consistent with the previous year’s results.
British Land experiences a slight increase in overall portfolio value, estimated at 0.2 per cent, largely driven by a significant five per cent rise in the value of its retail parks. In the first half of the current financial year, British Land’s asset acquisitions totalled £270 million, accompanied by disposals worth £407 million. These strategic moves demonstrate British Land’s ongoing effort to optimise its asset portfolio and enhance value for shareholders.
British Land’s acquisition of retail parks reaffirms its strategic leadership, promising enhanced growth and financial performance.
