British Land has exchanged contracts to sell its 50% stake in the Meadowhall Shopping Centre to its joint venture partner Norges Bank Investment Management for £360m. The sale was in line with the company’s strategy to focus on retail parks and reduce exposure to shopping centres.
The sales price, which values the whole site (including some ancillary land which was sold earlier this year for £14m) at £734m, was 3% above the September 2023 book value.
Proceeds for British Land, after net debt of £200m, are expected to total £156m. The company said that the impact of the transaction on full year 2025 EPRA net tangible assets (NTA) per share is expected to be negligible and the earnings dilution is estimated to be 0.6p per share prior to reinvestment. Loan to value (LTV) would fall 2.7 percentage points.
As part of the transaction, British Land will remain as asset manager of Meadowhall shopping centre, for which it will continue to earn fees in line with current terms.
The transaction is expected to complete in July 2024 and the proceeds will be used for general corporate purposes including reinvestment into retail parks.
Simon Carter, chief executive of British Land, 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.”