British Land has announced an £88 mln (EUR 130 mln) sale and leaseback agreement with telecommunications company Cable & Wireless for nine properties. The majority of the Cable and Wireless properties are in London and operate as offices and network sites. The total floor space is 33,900 m[sup]2[/sup].
British Land has announced an £88 mln (EUR 130 mln) sale and leaseback agreement with telecommunications company Cable & Wireless for nine properties. The majority of the Cable and Wireless properties are in London and operate as offices and network sites. The total floor space is 33,900 m2.
The 25-year leases are linked to the Retail Price Index (RPI) to a maximum of 6% per annum compound. The initial rental income will be £4.54 mln per year for the first five years, followed by reviews at five-year intervals. The net initial yield is 5%, British Land said in a statement.
This is the fourth addition this year to British Land's £2 bn portfolio of properties let on index-linked or minimum uplift rental agreements. Bob Bowden, British Land's investment director commented: 'RPI-indexed leases provide us with security of income and good cash flow growth from the fixed uplifts'. He said British Land expects rental value growth to exceed RPI in the important London office sector and this would be 'recognised in valuations and captured at lease expiry'.
Clay Street Property Investment Consultants and CCRE acted for British land. Doherty Baines advised Cable & Wireless.