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British Land exchanges on the disposal of £429m of Sainsbury’s superstores

British Land has exchanged on the sale of 12 superstores from its joint venture with Sainsbury’s in a £429 million deal. The sale represents a net… View Article

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British Land exchanges on the disposal of £429m of Sainsbury’s superstores

British Land has exchanged on the sale of 12 superstores from its joint venture with Sainsbury’s in a £429 million deal.

The sale represents a net initial yield of 5% to Realty Income Corporation. British Land’s share of the proceeds will be £193.5 million.

British Land is currently working towards building a more mixed-use business with a reduced focus on the retail sector. This includes building up a portfolio of campus focused London offices and build-to-rent residential schemes. As part of this, the company expects retail to eventually account for around 30 to 35% of its assets, compared to around half today.  

The company has exchanged or completed on nearly £1 billion of retail assets sales since April 2018. This has included the sale of a Debenhams store in London’s Clapham and the Spirit pubs portfolio.

Once the Sainsbury’s transaction completes at the end of May, the company’s superstores exposure will fall to 1.3% of its portfolio based on September 2018 valuations, with six standalone stores remaining.  Net proceeds to British Land are expected to be around £95 million following the repayment of debt and associated break costs.

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