British Land exchanges on West End buildings interest for £401m

British Land co-owns Meadowhall shopping centre in Sheffield.British Land co-owns Meadowhall shopping centre in Sheffield.
British Land co-owns Meadowhall shopping centre in Sheffield.
British Land has announced that it has exchanged on the sale of a 75 per cent interest in a portfolio of three buildings in the West End to Allianz Real Estate for £401m.

The transaction represents a blended net initial yield of 4.32 per cent, a premium to September book value and is expected to complete in January.

The co-owner of Meadowhall shopping centre in Sheffield said the transaction demonstrated its commitment to recycle capital out of assets not aligned to its core focus on mixed use London campuses, providing greater flexibility to invest in developments, including Norton Folgate, which it committed to in November and Canada Water, where its has planning permission for its 53 acre masterplan.

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The sale brings total asset disposals to date in the financial year 2021 to £1.1bn.

Simon Carter, chief executive of British Land, said: "Having delivered outstanding office space and attracted high quality occupiers, we are thrilled to have secured Allianz Real Estate as our partner and crystallised significant value for shareholders.

"This transaction demonstrates that like us, investors remain confident in the long term prospects for high quality assets in prime London locations."

Kari Pitkin, head of business development for Europe at Allianz Real Estate, said: "We are delighted to be working with such a respected partner in British Land.

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"This transaction represents a great opportunity to invest in prime assets in a global city on behalf of our Allianz clients thereby broadening our UK investment portfolio."

British Land will form a new joint venture with Allianz, with the real estate firm's interest at 25 per cent and Allianz's at 75 per cent.

British Land will continue to manage all three buildings and will receive an asset management fee.

The portfolio includes three buildings, 10 Portman Square, Marble Arch House and York House, all of which are in Marylebone.

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Last month, British Land reported underlying profit of £107m in its half year results, down from £152m the previous year.

The firm, which co-owns Meadowhall with Norges Bank Investment Management, also saw a 34.8 per cent fall from 16.1p to 10.5p in underlying earnings per share.


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