British Land and Royal London Asset Management have launched a 50:50 joint venture to deliver a science and innovation building at 1 Triton Square.
The agreement, valuing 1 Triton Square at £385 mln (€450 mln), will unite the two firms' development and asset management capabilities to deliver a mix of fitted and lab-enabled space, as well as the potential to incorporate serviced offices.
1 Triton Square is located in the Regent’s Place campus within London’s Knowledge Quarter, which is home to leading research institutions including The Francis Crick Institute, The Wellcome Trust, The Alan Turing Institute and University College London.
The JV marks an important milestone for Royal London Asset Management’s property team as it builds on its existing life sciences and innovation platform across the Golden Triangle of London, Cambridge and Oxford.
Simon Carter, chief executive of British Land, said: 'We are delighted to be working with Royal London Asset Management to deliver a world class science and innovation building at Regent’s Place.
'We proactively took 1 Triton Square back from Meta to reposition it for science and innovation customers, with the expectation of unlocking significantly higher rents, whilst benefitting from a considerable surrender premium to further improve the economics.
'This transaction is another example of how we drive value through establishing innovative JV partnerships, enabling us to flex our balance sheet, share the risk and crystallise the value created from Meta’s surrender premium.'
Mark Evans, head of property and commercial development at Royal London Asset Management Property, said: 'We are thrilled to join forces with British Land to reposition 1 Triton Square for the science and innovation market.
'The partnership opportunity aligns with our wider strategy to leverage our platforms in new markets and continue to deliver on our commitment to purposeful investment.
'We have long recognised the demand for best-in-class science and innovation space, particularly in the Golden Triangle, and the need for this space in supporting the UK’s economic growth.
'1 Triton Square will increase our holdings to over 2.0m sq ft and will form a core part of our wider portfolio as we position life sciences and innovation as a core platform for further investment.'
British Land will receive gross proceeds of £192.5 mln from the sale of a 50% share in addition to the £149 mln surrender premium already received from Meta. The combined impact of the surrender premium, JV formation and subsequent fit-out and leasing is expected to deliver a 30%+ IRR.
The transaction reduces LTV by 1.4%, largely mitigating development capex incurred across the business in H2 FY24.
