© Copyright Acquisition International 2024 - All Rights Reserved.

Article Image - British Land Exchanges £733 Million of Joint Venture Properties With Tesco
Posted 23rd March 2015

British Land Exchanges £733 Million of Joint Venture Properties With Tesco

British Land announces it has completed a £733 million property exchange transaction with Tesco. Under the terms of the transaction, British Land has sold its 50% interest in a joint venture portfolio of 21 stand-alone foodstores to Tesco and acquired Tesco's 50% interest in two joint venture portfo

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

British Land Exchanges £733 Million of Joint Venture Properties With Tesco
Image

British Land Exchanges £733 Million of Joint Venture Properties With Tesco

British Land announces it has completed a £733 million property exchange transaction with Tesco. Under the terms of the transaction, British Land has sold its 50% interest in a joint venture portfolio of 21 stand-alone foodstores to Tesco and acquired Tesco’s 50% interest in two joint venture portfolios predominately comprising Tesco-anchored shopping centres and retail parks.
The transaction is in line with our strategy to evolve our retail portfolio. It further reduces our foodstore weighting and increases our exposure to multi-let retail parks and shopping centres. Our full ownership of these assets will provide significant potential to add further value through asset management and development.

Charles Maudsley, Head of Retail & Leisure, British Land, said: “This mutually beneficial transaction clearly demonstrates the great relationship we enjoy with Tesco. It plays to our strengths of managing multi-let assets and gives Tesco more control of their stand-alone portfolio. We see significant opportunity to add value and drive returns through asset management and development.”

Key transaction terms

Sale of 50% stake in the Tesco Aqua Limited Partnership (“Aqua”) comprising 21 stand-alone foodstores; portfolio value £352 million (50% share); weighted average lease length of 13.3 years; NIY 4.8%
Acquisition of 50% stakes in Tesco BL Holdings Limited (“TBLH”) and The Tesco British Land Property Partnership (“TBLPP”) comprising 3 retail parks and 3 shopping centres, all anchored by Tesco stores, and 3 stand-alone foodstores; combined portfolio value £381 million (50% share); weighted average lease length of 11.4 years; topped up NIY 5.2%
British Land will make a net cash payment of £96 million to Tesco reflecting the difference in net asset value (including mark to market on debt) for Aqua (£81 million) and the combined TBLH and TBLPP joint ventures (£177 million).
In line with strategy to evolve the Retail portfolio

Stand-alone foodstore weighting reduced from 10% of portfolio to 8%
Increases focus on multi-let assets; number of stand-alone foodstores reduced from 79 to 58
Reduces the number of British Land joint ventures by 3 and the number of assets held in joint ventures by 30
Opportunity to drive returns through asset management and development

Taking full ownership of 660,000 sq ft of retail parks and 730,000 sq ft of shopping centres
Potential to enhance returns through asset management notably at Serpentine Green, Peterborough, Beaumont Leys, Leicester and the Kingston Centre, Milton Keynes
Asset swaps in line with valuation and accretive to earnings

Property asset swaps in line with latest reported valuations
Transaction accretive to earnings
Group weighted average interest rate reduced by 15 basis points

Financial effects

Overall, the transaction is accretive to earnings in 2016 reflecting a £2 million increase in net rent and an £8 million reduction in net interest.

The assets acquired within the TBLH and TBLPP joint ventures generate annual accounting net rental income of £20 million. The assets sold within the Aqua joint venture generate £18 million.

The acquired debt held within the TBLH and TBLPP joint ventures currently bears interest of £5 million per annum. The Aqua disposal saves £14 million of interest per annum and including the £96m of net cash payable to Tesco the interest saving is £8m per annum. The net cash payable will be funded from existing resources.

The Group’s proportionally consolidated weighted average interest rate is reduced by 15 basis points. The proportionately consolidated weighted average debt maturity is unchanged at 8.9 years. The transaction increases LTV by 0.4%.

Net asset value per share is reduced by 3 pence per share principally due to the impact of mark to market on the debt.

 

Categories: Finance, M&A


You Might Also Like
Read Full PostRead - Eye Icon
Easing the Strains of Relocation
Finance
31/08/2016Easing the Strains of Relocation

Permit Pro provides specialised immigration services for expatriates and their family who plan to work and live in Malaysia.

Read Full PostRead - Eye Icon
CFH Docmail Acquisition of BSS Scotmail
Finance
04/08/2015CFH Docmail Acquisition of BSS Scotmail

CFH Docmail Acquisition of BSS Scotmail

Read Full PostRead - Eye Icon
Business Process Automation in a Nutshell
Innovation
21/10/2022Business Process Automation in a Nutshell

No matter what your organization does, one thing is for sure: it executes hundreds of processes daily. For example, if you work in Finance, there are specific processes related to your market. Moreover, each department inside your organization runs different p

Read Full PostRead - Eye Icon
How to Improve Social Media Presence with Instantly Delivered Instagram Likes and Followers
Innovation
31/08/2022How to Improve Social Media Presence with Instantly Delivered Instagram Likes and Followers

A prominent social media presence is a key to a successful business. Young entrepreneurs understand the need for social media promotion and keep looking for new social media platforms and ways how they can make their presence appealing to the target market. So

Read Full PostRead - Eye Icon
How to Understand Stock Market Basics
Finance
17/02/2021How to Understand Stock Market Basics

The stock market can be a profitable and exciting way to diversify your income and investments. It can also be a bottomless pit of confusion. Even if you have decided to hire a professional to trade on your behalf you will still want to be knowledgeable about

Read Full PostRead - Eye Icon
Agile. Integrated. Transformative.
Innovation
08/08/2022Agile. Integrated. Transformative.

Jesta I.S. is a global developer and supplier of integrated cloud-based software which is 100% focused on manufacturers, wholesalers, and retailers specializing in fashion apparel, footwear, housewares, and consumer discretionary industries.

Read Full PostRead - Eye Icon
Key Strategies For Successful Mortgage Branch Management
Finance
19/01/2024Key Strategies For Successful Mortgage Branch Management

Running a profitable mortgage branch is no small feat. As a branch manager, you juggle a lot - from attracting and retaining superstar loan officers to streamlining operations and boosting productivity.

Read Full PostRead - Eye Icon
How to Improve Efficiency at Your Warehouse
News
25/03/2024How to Improve Efficiency at Your Warehouse

How to Improve Efficiency at Your Warehouse Meta: How do you improve efficiency at your warehouse? Read our tips to find out. INSERT IMAGE: https://images.unsplash.com/photo-1586528116022-aeda1613c63d?q=80&w=1771&auto=format&fit=crop&ixlib=rb-4

Read Full PostRead - Eye Icon
The Power of Giving Back: Why Corporate Social Responsibility Matters
Corporate Social Responsibility
22/04/2022The Power of Giving Back: Why Corporate Social Responsibility Matters

As we enter 2022, consumers and employees are looking for transparency and authenticity from companies, with 59% of consumers stating that businesses have a responsibility to social good.



Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

Arrow