British Land has divested 50% of its share in the Canada Water Masterplan to pension fund AustralianSuper for £290 mln (€350 mln).
The deal sees the creation of a 50:50 joint venture to accelerate the delivery of the 53 acre (21 ha) mixed-use development in the London docklands. British Land said it would also release capital for further development.
The UK will earn fees from the JV as the development and asset manager for the masterplan, and will be entitled to an enhanced return if the JV meets certain returns targets.
Simon Carter, CEO British Land said: 'We are delighted to be working with AustralianSuper on this exciting development to deliver a new urban centre for London at Canada Water.
'The investment by AustralianSuper, who have extensive experience investing in major regeneration schemes, is testament to the strength of British Land’s reputation and best in class development and operational platform.
'This new partnership enables us to move faster, delivering new homes and workspace, creating new opportunities for local people and delivering value for our shareholders.
'This transaction is a great example of our proactive approach to recycling our capital and leveraging our expertise by working with like-minded partners.'
Work on site
The JV commences with phase 1 of the masterplan, which is expected to complete in Q3 2024. The partners have committed to £201 mln of initial funding for phase 1, and to progress subsequent phases of the development.
It is understood that future development will be funded through a combination of shareholder equity and third party debt. The London Borough of Southwark also has the right to participate in the masterplan, but has elected not to fully participate in Phase 1.
Paul Clark, senior investment director property UK, AustralianSuper said: 'Our investment in Canada Water will contribute to the retirement savings of our 2.6 million members, whilst also being part of a once-in-a-lifetime regeneration project that will provide benefits to residents, businesses and the community for generations to come.
'The Canada Water Masterplan fits with our focus on investing at scale in large mixed-use projects in major urban centres and we believe this location will become a preferred destination for a range of end-users.
'We are actively pursuing new large-scale investment opportunities in the UK and Europe, as well as building out our local team to support this objective. The opportunity to come together with a partner of the calibre of British Land is a critical step to our ongoing expansion in the region and closely aligns to our focus on high quality assets and responsible investment.'
Background to the masterplan
Covering 53 acres, the masterplan is located in Zone 2 on the Jubilee Line and London Overground.
British Land achieved full planning permission for the scheme in 2020, with flexible consent allowing for the delivery of between 2,000 and 4,000 new homes alongside a mix of commercial, retail and community space.
The UK firm said it was already on site with the first three buildings covering 582,000 ft2 (54,000 m2) including 265 new homes.
Over 35% of the masterplan will be public realm while developments will target the highest environmental standards including BREEAM Outstanding on the Commercial space, BREEAM Excellent on the retail and Home Quality Mark Beta 3* for residential.
