British Land takes control of Surrey Quays mall

UK REIT British Land has acquired the 50% holding of joint venture partner Tesco in the 300,000 sq ft (27,870 m2) Surrey Quays Shopping Centre.

The price totalled £48 mln (€56.5 mln). Following the purchase, British Land’s ownership in the centre will be 100%.

As part of the deal, Tesco has committed to a new long-term lease on its store and the petrol filling station, which account for a significant part of the centre's income. This increases the weighted average lease length of the centre to 9.4 years, British Land said in a statement.

The mall, located in South East London, is anchored by a 115,000 sq ft Tesco Extra with other retailers including Bhs, River Island, New Look, JD, Boots, Burton and Dorothy Perkins.

British Land intends to progress plans in 2014 for a £38 mln upgrade of the shopping centre which will include a 100,000 sq ft extension, the refurbishment of the existing scheme along with improvements to public spaces and connections to Surrey Quays and Canada Water tube and bus stations.

Canada Water, which is close to Canary Wharf, represents one of London's major regeneration areas. British Land has a long-term interest in the area through its investment in Surrey Quays and the ownership of the 14.6 acre Harmsworth Quays printing works site where it is planning a residential-led mixed use re-development.

The UK REIT has just won approval for the acquisition of media conglomerate Daily Mail General Trust's leasehold interest in the 59,000-m2 Harmsworth Quays site.

The acquisition follows British Land's £493 mln share placing with a view to taking advantage of attractive investment opportunities, particularly in London and the South East. The company has bought Wereldhave’s London portfolio (principally Ealing Broadway shopping centre) for £180 mln and the Hempel Hotel in Notting Hill for £33 mln.