Wereldhave exits the UK, sells portfolio to British Land

Dutch listed property company Wereldhave is pulling out of the UK after selling the bulk of its portfolio in the market to British Land.

The UK REIT paid £183.8 mln (€215 mln) for the assets.

Wereldhave has also exchanged contracts on the sales of other UK assets but those deals have not completed yet. Once the UK portfolio is sold in its entirety proceeds from the disposals will amount to £243 mln (€286 mln), approximately 4% below the book value at end-September 2012 of £254 mln.

The net exit yield amounts to 6.5% before and 5.75% after deduction of the general costs for the UK organisation.

The transaction with British Land will be completed during the first quarter.

Wereldhave said the sale was part of its response to the changing environment for consumer and finance markets. The company has decided to focus on shopping centres in northwestern Europe and sustainable offices in Paris. It has already pulled out of the US market.

The most significant asset in the UK portfolio is Ealing Broadway Shopping Centre which British Land purchased for £142.5 mln, representing a net initial yield of 6.9%.

The asset was sold about 15 months after Wereldhave bought it for £155.5 mln (€182 mln), reflecting a net initial yield of 6.5%.

Ealing Broadway Shopping Centre has 28,000 m2 of retail and leisure space, 800 car parking spaces and a multi-let office. The 3-hectare freehold shopping centre, which has recently been refurbished and has over 60 retail units, is anchored by Primark, Marks & Spencer, Tesco, River Island and H&M with other occupiers including Boots, Jack & Jones and Wagamama.

Wereldhave's UK portfolio also includes five retail and office properties in Baker Street, Chiswick High Road, Putney High Street Fulham Road and Great Portland Street which were purchased by British Land for £41 mln, or a net initial yield of 5% rising to 6.1% when fully let.

Jackson Criss and Strutt & Parker acted for British Land.