British Land to raise £500m for new investments

LANDLORD British Land said it intends to raise £500m from shareholders to fund new investment opportunities.

The company said it had sold off an office block in London’s City financial district for £472m.

British Land plans to place 89.7 million new ordinary shares, representing 9.99 per cent of British Land’s existing issue share capital. Of the £500m raised, it will use £213m to fund recent acquisitions and another £150m for deals in advanced negotiations.

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British Land said its desire to raise cash was driven by a “clear acceleration in the flow of opportunities” that it had seen in its key office and retail sectors in recent months.

“Many of these opportunities are being driven by structural changes, as institutions reconfigure their property holdings and smaller competitors look to exit the UK market,” it said in the statement.

“In addition, the company believes that vendors are showing an increasing realism around values, with access to finance continuing to constrain many buyers.”

The company said it expects the investments to enhance future growth in earnings and returns, and to be earnings accretive on an annualised basis within 12 months once the capital had been deployed.

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British Land’s announcement comes after rival Intu Properties launched plans to raise cash from shareholders to fund a £250.5m deal to buy the Midsummer Place shopping centre in Milton Keynes.

Property investors in Europe are casting an eye on riskier assets and are keen to spend after years of cautiousness as concerns over the euro zone ease, property consultant CBRE said last week.

British Land also said it would receive £461m after costs from the sale of Ropemaker Place, a 593,000 square foot office block whose tenants include the Bank of Toyko-Mitsubishi UFJ, to a consortium represented by AXA Real Estate. It intends to invest the sale proceeds into its London development programme.

British Land owns the Meadowhall shopping centre, near Sheffield, alongside Norges Bank Investment Management.

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