14th Jul 2006 09:00
Kingfisher PLC14 July 2006 Press Release 14 July 2006 KINGFISHER AND BRITISH LAND AGREE STORES DEAL Kingfisher plc and The British Land Company PLC have agreed a deal on seven B&QWarehouse large format stores. Kingfisher plc has sold a subsidiary company,which owns the seven stores, to The British Land Company PLC for a total cashpayment of £198 million. The stores, all freehold, are in prime edge of town locations in Ashford, Bury,Exeter, Glasgow, Grimsby, Lincoln and North Shields. The stores areapproximately 100,000 sq ft each and, in total, extend to nearly 700,000 sq ft.The portfolio represents approximately 7 per cent of Kingfisher's total freeholdand long leasehold assets. The stores are let at current market rental levels to B&Q PLC (Kingfisher's mainUK subsidiary) on 20-year leases with the tenant having an option to break after15 years. The leases have been structured to provide significant operational flexibilitythrough assignment, under-letting and alterations. The rent is payable monthlyin advance and will be uplifted annually in line with the change in the RetailPrices Index, subject to a cap. This reflects B&Q's desire to align propertyoccupation costs more closely with the operating business environment. It willlimit B&Q's rental increases for the stores and protects the business from anyincreases above the current rate of inflation. It also provides stability andcertainty of cashflow for B&Q. Terry Hartwell, Group Property Director of Kingfisher, said: "Through thistransaction, Kingfisher is taking advantage of the current buoyancy in thedirect property investment market in the UK to finance its operational businessat attractive rates going forward. The proceeds of the transaction will be usedto repay existing debt and to invest in Kingfisher's worldwide store openingprogramme, including further freehold acquisitions." Bob Bowden, Property Investment Director, British Land, said: "This purchaselies within our core out of town retail expertise and adds to our portfolio ofindex linked leases in which we see value." For further information: Kingfisher: 020 7372 8008Ian Harding, Group Communications Director British Land: 020 7486 4466Bob Bowden, Property Investment DirectorLaura De Vere, Corporate Communications Director Finsbury: 020 7521 3801Faeth Birch This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
KingfisherBritish Land