7th Feb 2014 07:37
LONDON (Alliance News) - British Land PLC Friday said it has ended up with a 57.2% stake in specialist retail park property group Hercules Unit Trust after a scheduled pre-emption process, a deal that will boost its earnings.
The company said Wednesday it wanted to raise its stake to 54.2%, from 49.2%, but could end up with more if it was allocated more than its pre-emptive allocation in the tender.
In its statement Friday, it said it has agreed to buy GBP66.8 million worth of units at GBP613 each, 3.8% below the latest net asset value per share. It said the purchase represents an initial yield of 6.1%.
British Land is property adviser to Hercules, which is the UK's largest specialist retail park property unit trust with a portfolio of GBP1.5 billion and contracted net rent of GBP86.5 million.
Its portfolio comprises 17 retail parks across the UK, including Glasgow Fort Shopping Park and 50% of Fort Kinnaird Shopping Park, Edinburgh. The parks have a diverse range of occupiers including Arcadia, Asda, Boots, Marks & Spencer, Next, Sports Direct and TK Maxx.
British Land said the deal will boost its earnings. Hercules will now be treated as a subsidiary and fully consolidated in its accounts from the end of March, including its debt.
The company's proportionally consolidated loan to value will rise by 0.6 percentage points to 42% and its statutory loan to value ratio will rise by 3.3 percentage points to 31%.
By Steve McGrath; [email protected]; @SteveMcGrath1
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