20th May 2024 10:27
(Alliance News) - Property investor British Land Co PLC sharpened its retail parks focus by selling its holding in the Meadowhall Shopping Centre in Sheffield.
British Land will net GBP360 million, with the asset sold to partner Norges Bank Investment Management. Proceeds, after net debt of GBP200 million, are expected to total GBP156 million. Those funds will be used for "general corporate purposes including reinvestment into retail parks".
"This follows the sale of some ancillary land by the joint venture for GBP7 million (British Land share) earlier this year. Together these deals value the entirety of the Meadowhall Estate at GBP734 million, 3% above September 2023 book value," the firm said.
The deal is expected to be sealed in July.
Chief Executive Simon Carter said: "We have had a successful partnership with Norges over many years and are delighted to continue to work alongside them as asset managers of the centre. Following the sale of Meadowhall, 93% of our portfolio is now in our preferred segments of retail parks, campuses and London urban logistics. We will continue to grow our retail park portfolio; with low capex requirements parks offer attractive cash returns and at 99% occupancy we are delivering strong rental growth."
Shares in the company traded 0.9% lower at 399.77 pence each in London on Monday morning.
Shore Capital Markets analyst Andrew Saunders believes the deal is a positive development.
"The timing is clearly significant and reflective of growing investor optimism in retail assets," Saunders said.
"The ability for British Land to realise an exit from Meadowhall is a further enhancement to the positive investment case in our view, with a helpful reduction in debt and loan-to-value while also facilitating greater focus on its target growth markets of retail parks, London campuses and urban logistics."
Saunders added: "British Land reports final results on Wednesday this week and we expect to hear of continued progress in both leasing and developments, particularly in London campuses, as it refocuses its portfolio positioning."
By Eric Cunha, Alliance News news editor
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