British Land sells large stakes in three London office buildings for £401m

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Ealing Broadway owner British Land sells large stakes in three London office buildings to Allianz for £401m

  • British Land has now sold £1.1billion worth of property this financial year 
  • Its recent six-month results showed post-tax losses widening to £730m 
  • Real estate firms have been badly affected by the coronavirus pandemic  

Commercial property giant British Land has sold a three-quarters stake in three London West End buildings to asset manager Allianz Real Estate for just over £400million.

It also agreed to form a joint venture where the FTSE 100 firm will continue to manage the buildings based in Marylebone – and collect an asset management fee, though it will only control a quarter of the new partnership.

The three premises are primarily office space and have a combined 310,000 square feet between them and were valued at more than £500million in late September.

British Land runs the West London office and retail development Ealing Broadway

British Land runs the West London office and retail development Ealing Broadway

They are 10 Portman Square, Marble Arch House and York House, the latter of whom houses British Land’s headquarters and 22 residential flats, while Marble Arch House contains ten luxury flats.

The £401million disposal takes the total value of sales the real estate giant has made this financial year to £1.1billion and comes a month after it completed a deal to sell its Clarges Mayfair complex to the German financial services group Deka for £177million.

Kari Pitkin, Allianz Real Estate’s head of business development for Europe, believes the acquistion ‘represents a great opportunity to invest in prime assets in a global city on behalf of our Allianz clients thereby broadening our UK investment portfolio.’

British Land said the sale would enable it to put greater focus on some mixed-use sites such as Shoreditch-based Norton Folgate and Canada Water, an area of East London situated very close to Canary Wharf.

The business has over 22 million square foot of space under its management including the shopping centres Ealing Broadway, Sheffield’s Meadowhall Centre, and Drake Circus in Plymouth.

‘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,’ remarked chief executive Simon Carter.

British Land is the co-owner of the Meadowhall shopping centre in Sheffield

British Land is the co-owner of the Meadowhall shopping centre in Sheffield 

‘This transaction demonstrates that like us, investors remain confident in the long term prospects for high-quality assets in prime London locations.’

Coronavirus has badly affected their bottom line this year as Britons work from home more often and shopping centres experienced lower footfall due to the temporary closure of non-essential stores and the rise of online purchases.

Last month, it published its half-year results showing post-tax losses sharply widening to £730million from £404million the year before and had gathered only 62 per cent of September quarter rent from its retail clients.

Coronavirus has badly affected the bottom line of property giants like British Land this year as Britons work from home more often and shopping centres experienced lower footfall

Coronavirus has badly affected the bottom line of property giants like British Land this year as Britons work from home more often and shopping centres experienced lower footfall

However, the comparative figure for its office clients was 97 per cent, and while the group said traffic at its retail outlets was only 82 per cent of 2019 levels, only 5 per cent of its retail portfolio was unoccupied.

Thanks to a recovery in activity and income from property sales, British Land announced in October that it would restart paying dividends on a biannual basis rather than quarterly and at a significantly lower underlying earnings per share.

They had been initially suspended in March as the coronavirus pandemic was starting to rip through the UK and it was forced to close down or operate a considerable proportion of its offices and shopping spaces at a reduced capacity.

Shares in the company were up 0.8 per cent just before midday to 487.5p. However, they have fallen 22 per cent in 2020.



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