British Land has confirmed its acquisition of seven retail parks for £441m.
- The funding will be sourced from existing resources and a £300m equity placing.
- Properties acquired include key retail locations with high occupancy rates.
- Chief Executive Simon Carter emphasised the strategic value of the acquisition.
- The company forecasts increased earnings and asset value growth from this deal.
British Land has announced the acquisition of a significant portfolio of seven premium retail parks at a total cost of £441 million. The real estate giant plans to finance this purchase with a combination of existing resources and a substantial equity placing, valued at approximately £300 million via an accelerated bookbuild process. This portfolio was secured from Canadian investment firm Brookfield and includes retail parks that have maintained a remarkable 99 percent occupancy rate, generating a total passing rent of £29.5 million and offering a strong net initial yield of 6.7 percent.
The retail parks included in the acquisition feature prominent locations such as Elliott’s Field Shopping Park in Rugby, Central Retail Park in Falkirk, and Wellington Retail Park in Waterlooville. These sites are distinguished by their large superstores that serve as anchor tenants, enhancing the appeal and stability of the portfolio.
Simon Carter, Chief Executive of British Land, commented on the acquisition’s strategic importance, 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.” Carter further highlighted the financial advantages, noting, “These assets offer an attractive yield and strong rental growth prospects in line with our guidance of three per cent to five per cent. Combined with the proposed placing, they will be immediately earnings accretive and are expected to deliver double-digit ungeared internal rates of return.”
British Land has shared a trading update for the six months ending 30 September, forecasting an underlying profit in the region of £142 million to £144 million, consistent with the £142 million reported in the first half of 2023. Additionally, the firm anticipates a slight increase in portfolio value by 0.2 percent, with a notable five percent growth in the value of retail parks specifically.
Earlier in the year, British Land reported asset acquisitions totalling £270 million and disposals amounting to £407 million. This latest acquisition underscores British Land’s commitment to enhancing its portfolio with strategic investments in high-performing retail locations.
This transaction exemplifies British Land’s strategic focus on advancing its retail parks portfolio, reflecting continued confidence in this sector’s robust growth potential.
