UK REIT British Land has exchanged upon the sale of a 75% interest in a portfolio of three buildings in the West End to Allianz Real Estate, acting on behalf of several Allianz Group companies, for £401 mln (€442 mln).
The transaction represents a blended net initial yield of 4.32%, and reflects a premium to September book value. It is expected to complete in January.
‘This transaction demonstrates our commitment to recycle capital out of assets not aligned to our core focus on mixed use London campuses, providing greater flexibility to invest in developments, including Norton Folgate, which we committed to in November and Canada Water, where we have planning permission for our 53 acre masterplan,’ British Land said in a statement.
The sale brings total asset disposals to date in FY21 to £1.1 bn.
As part of the transaction, British Land will form a new joint venture with Allianz, with British Land’s interest at 25% and Allianz’s at 75%. British Land will continue to manage all three buildings and will receive an asset management fee.
The portfolio includes three buildings, 10 Portman Square, Marble Arch House and York House, all of which are in Marylebone. 10 Portman Square comprises 134,000 sq ft (12,500 m2) of high quality, multi-let office space on Portman Square. Marble Arch House is a 76,000 sq ft office-led building close to Marble Arch station and opposite York House, which is 100,000 sq ft of primarily office space with 22 residential apartments. The office tenants at York House include British Land and we have signed a new ten year lease on our space.
The assets had a combined valuation of £508 mln (at 100%) at 30 September and the total net rent attributable is £21.1 mln.
Simon Carter, Chief Executive, British Land, said: ‘This transaction demonstrates that like us, investors remain confident in the long term prospects for high quality assets in prime London locations.’
Kari Pitkin, head of Business Development for Europe at Allianz Real Estate, said: ‘This transaction represents a great opportunity to invest in prime assets in a global city on behalf of our Allianz clients thereby broadening our UK investment portfolio.’
Savills advised Allianz. JLL acted for British Land.
