UK REIT British Land has taken a major step towards rebalancing its portfolio by selling 12 superstores from its joint venture with Sainsbury's for £429 mln (€495 mln).
The sale to Realty Income Corporation represents a net initial yield of 5.0%, with British Land taking a £193.5 mln share of the proceeds, which represents a 'modest premium' on their September 2018 book value, the company said. Net proceeds are expected to be around £95 mln once debts and other associated break costs have been repaid.
British Land is aiming to cut the share of retail in its total assets to around 30-35% from its current level of around 50% as it shifts its focus to campus-focused London offices, refocused retail businesses and residential. Since April 2018 it has exchanged or completed nearly £1 bn of retail asset sales, including the disposal of department store chain Debenham's Clapham branch and the Spirit pubs portfolio.
In a statement the company said: 'We are focused on further sales of retail assets which are not aligned to our strategy and continue to make good progress.'
British Land established its JV with Sainsbury's in 2008, when the 50-50 partnership incorporated 39 superstores with a total valuation of €1.5 bn.
The latest transaction will bring British Land's superstores exposure down to 1.3% of its portfolio based on September 2018 values, with six standalone stores remaining.
