British Land (BLND) announced it has exchanged upon the sale of a 75% interest in a portfolio of three buildings in London’s west end to Allianz Real Estate (acting on behalf of several Allianz Group companies) for £401m. The transaction represents a blended net initial yield of 4.32%, a premium to September book value and is expected to complete in January.
‘Transaction part of the commitment to recycle non-core assets’
BLND notes that this deal is evidence of its commitment to recycle capital out of assets not aligned to our core focus on mixed use London campuses, providing greater flexibility to invest in developments, including Norton Folgate, which BLND committed to in November and Canada Water, where the company has planning permission for its 53-acre masterplan. The sale brings total asset disposals to date in FY21 to £1.1bn.
Simon Carter, chief executive, BLND, noted: “Having delivered outstanding office space and attracted high-quality occupiers, we are thrilled to have secured Allianz Real Estate as our partner and crystallised significant value for shareholders. This transaction demonstrates that like us, investors remain confident in the long term prospects for high-quality assets in prime London locations.”
BLND to form a new joint venture with Allianz
BLND will form a new joint venture with Allianz, with BLND’s interest at 25% and Allianz’s at 75%. BLND will continue to manage all three buildings and will receive an asset management fee.
The portfolio includes three buildings, 10 Portman Square, Marble Arch House and York House, all of which are in Marylebone.10 Portman Square comprises 134,000 sq ft of multi-let office space on Portman Square. Marble Arch House is a 76,000 sq ft office-led building close to Marble Arch station and opposite York House, which is 100,000 sq ft of primarily office space with 22 residential apartments. The office tenants at York House include BLND and the company has signed a new ten-year lease on our space.
The assets had a combined valuation of £508m (at 100%) at 30 September and the total net rent attributable is £21.1m. BLND notes that prior to any reinvestment the transaction will reduce underlying earnings per share by around 1.4p and LTV by 2.7%.
BLND: British Land agrees £401m West End offices sales to Allianz Real Estate