British Land announces retail park portfolio acquisition and proposed placing

Commercial property giant British Land reported it had acquired a portfolio of seven high quality retail parks for £441m from global investment firm Brookfield, including Elliott’s Field Shopping Park in Rugby.

It added that it planned an equity placing of around £300 m, by way of an accelerated bookbuild offering, to fund this acquisition, with the remainder to be financed from
"existing cash and in place facilities".

READ MORE: Rugby logistics business acquired

"The acquisition of this high quality portfolio builds upon our market leading position in retail parks," said SImon Carter, CEO of British Land in a statement.

"Parks remain the preferred format for retailers and we have deployed £711m of capital into this subsector since 1 April 2024.

"These assets offer an attractive yield and strong rental growth prospects in line with our guidance
of 3-5%.

"Combined with the proposed placing, they will be immediately earnings accretive and are
expected to deliver double digit ungeared IRRs," he added.

The Elliotts Field scheme is fully occupied and anchored by M&S, the firm noted.

The other six assets are Telford Forge Shopping Park, 96.2% occupied and anchored by Sainsbury's; Chilwell Retail Park, Nottingham, which is fully occupied and anchored by M&S; Central Retail Park, Falkirk, which is fully occupied and anchored by both M&S and Tesco.

Also in the portfolio is Wellington Retail Park, Waterlooville, which is 99.6% occupied and anchored by M&S; Ravenhead Retail Park in St Helens, which is 98.7% occupied and anchored by M&S, and Cleveland Retail Park in Middlesbrough, which is 98.8% occupied and anchored by M&S.

British Land also released a trading update for the six months to September 30, ahead of half year results on November 20 this year.

The company said it expected underlying profit of between £142m and 144m (HY24: £142m) despite a number of properties entering development and the prior year surrender of 1 Triton Square, with resulting underlying earnings per share of between 15.2 and 15.4p (HY24: 15.2p).

Carter said: "The broader business also continues to trade well with a good level of leasing in the period and cost discipline underpinning our profit performance.

"We expect portfolio values to be marginally up for the half year, with continued ERV growth across the portfolio."