British Land has successfully acquired seven UK retail parks from Brookfield Asset Management for £441 million.
- The acquisition strengthens British Land’s position in the retail park sector, which they consider a high-performing segment.
- Funding for the purchase will partly come from an equity placement aimed at raising approximately £300 million.
- CEO Simon Carter emphasises the importance of affordability, adaptability, and accessibility in retail parks.
- British Land remains optimistic about future rental growth due to high occupancy rates across the newly acquired locations.
British Land has made a significant acquisition in the commercial property sector by acquiring seven UK retail parks from Canadian investor Brookfield Asset Management. The deal, valued at £441 million, marks a strategic expansion for British Land, enhancing its retail park portfolio—which the company views as a thriving segment of the real estate market.
To partially finance the acquisition, British Land intends to conduct an equity placing, with the goal of raising around £300 million. This initiative reflects the company’s commitment to strengthening its presence in retail parks, seen as beneficial due to their unique characteristics.
CEO Simon Carter articulates the appeal of retail parks, highlighting their affordability, adaptability, and accessibility. He notes that lower rents enhance their appeal, thus driving their popularity with tenants who can use these spaces as click-and-collect venues or last-mile delivery hubs. “We started buying [retail parks] in 2021 and since then they have been the best performing part of UK real estate,” stated Carter, affirming British Land’s strategic focus.
The newly acquired parks boast a 99% occupancy rate, a testament to their popularity among tenants, who report that these locations “trade very well”. This high occupancy is a key factor in British Land’s optimistic outlook regarding potential rent increases, contrasting with other sectors of the commercial property market that have been struggling.
The wider commercial property market has faced challenges in the past two years, largely due to rising interest rates. However, there are signs of recovery, with retail parks standing out as a particularly successful segment. British Land’s recent acquisitions are well-positioned to leverage these trends, reinforcing its robust performance within the industry.
British Land’s acquisition underscores its strategic focus on retail parks, highlighting their value in a recovering commercial property market.
