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credit: British Land
credit: British Land

British Land makes further strategic progress in Retail Parks with over 137 million Euro of gross capital activity

British Land announced that since the half year results in November, it has completed on the acquisition of three high quality retail parks for a total of 107 million Euro and sold its 50% stake in a retail park in Preston for 34 million Euro.

These deals are in line with the company’s strategy to actively recycle capital and consolidate the position as the UK’s largest owner and operator of retail parks, strengthening the ability to sign portfolio leasing deals and enhance returns.

Summary of deals

  1. Acquisition of the Capitol Retail and Leisure Park, Preston for 59 million Euro, representing a net initial yield (NIY) of 8.43%. The 28,000 sq m park is let to a good mix of retailers including Next, Home Bargains and Boots. It is the most prominent retail park in the area and benefits from direct access to Preston city center and the M6 and M65 motorways.
  2. Acquisition of Solartron Retail Park, a 8,400 sq m retail park in Farnborough for 40 million Euro (7.65% NIY). The park is fully let to a strong mix of retailers including Lidl, Pets at Home and DFS, and benefits from an excellent southeast location within a growing and affluent catchment where retail supply is constrained.
  3. Acquisition of DFS, 442 Newmarket Road, a 1,900 sq m prime retail warehouse in Cambridge for 8.4 million Euro (7.14% NIY), which sits immediately adjacent to the B&Q British Land acquired last year. This purchase offers a secure income stream with the potential for a longer-term life sciences redevelopment in a strategic location.
  4. Sale of its 50% stake in Deepdale Retail Park, Preston to Melford Capital for 35 million Euro (7.5% NIY/BL share), in line with the company’s strategy of actively recycling capital. 

Kelly Cleveland, Head of Strategy and Investment at British Land, said: “With retailers increasingly focused on the role of their stores, retail parks have emerged as a preferred format, due to their compatibility with omni channel retail, their affordability and appeal to online resilient businesses. This is driving good occupational demand across the portfolio reflected in our 97% occupancy and growing ERVs.”