© Copyright Acquisition International 2024 - All Rights Reserved.

Article Image - British Land Exchanges £733 Million of Joint Venture Properties With Tesco
Posted 23rd March 2015

British Land Exchanges £733 Million of Joint Venture Properties With Tesco

British Land announces it has completed a £733 million property exchange transaction with Tesco. Under the terms of the transaction, British Land has sold its 50% interest in a joint venture portfolio of 21 stand-alone foodstores to Tesco and acquired Tesco's 50% interest in two joint venture portfo

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

British Land Exchanges £733 Million of Joint Venture Properties With Tesco
Image

British Land Exchanges £733 Million of Joint Venture Properties With Tesco

British Land announces it has completed a £733 million property exchange transaction with Tesco. Under the terms of the transaction, British Land has sold its 50% interest in a joint venture portfolio of 21 stand-alone foodstores to Tesco and acquired Tesco’s 50% interest in two joint venture portfolios predominately comprising Tesco-anchored shopping centres and retail parks.
The transaction is in line with our strategy to evolve our retail portfolio. It further reduces our foodstore weighting and increases our exposure to multi-let retail parks and shopping centres. Our full ownership of these assets will provide significant potential to add further value through asset management and development.

Charles Maudsley, Head of Retail & Leisure, British Land, said: “This mutually beneficial transaction clearly demonstrates the great relationship we enjoy with Tesco. It plays to our strengths of managing multi-let assets and gives Tesco more control of their stand-alone portfolio. We see significant opportunity to add value and drive returns through asset management and development.”

Key transaction terms

Sale of 50% stake in the Tesco Aqua Limited Partnership (“Aqua”) comprising 21 stand-alone foodstores; portfolio value £352 million (50% share); weighted average lease length of 13.3 years; NIY 4.8%
Acquisition of 50% stakes in Tesco BL Holdings Limited (“TBLH”) and The Tesco British Land Property Partnership (“TBLPP”) comprising 3 retail parks and 3 shopping centres, all anchored by Tesco stores, and 3 stand-alone foodstores; combined portfolio value £381 million (50% share); weighted average lease length of 11.4 years; topped up NIY 5.2%
British Land will make a net cash payment of £96 million to Tesco reflecting the difference in net asset value (including mark to market on debt) for Aqua (£81 million) and the combined TBLH and TBLPP joint ventures (£177 million).
In line with strategy to evolve the Retail portfolio

Stand-alone foodstore weighting reduced from 10% of portfolio to 8%
Increases focus on multi-let assets; number of stand-alone foodstores reduced from 79 to 58
Reduces the number of British Land joint ventures by 3 and the number of assets held in joint ventures by 30
Opportunity to drive returns through asset management and development

Taking full ownership of 660,000 sq ft of retail parks and 730,000 sq ft of shopping centres
Potential to enhance returns through asset management notably at Serpentine Green, Peterborough, Beaumont Leys, Leicester and the Kingston Centre, Milton Keynes
Asset swaps in line with valuation and accretive to earnings

Property asset swaps in line with latest reported valuations
Transaction accretive to earnings
Group weighted average interest rate reduced by 15 basis points

Financial effects

Overall, the transaction is accretive to earnings in 2016 reflecting a £2 million increase in net rent and an £8 million reduction in net interest.

The assets acquired within the TBLH and TBLPP joint ventures generate annual accounting net rental income of £20 million. The assets sold within the Aqua joint venture generate £18 million.

The acquired debt held within the TBLH and TBLPP joint ventures currently bears interest of £5 million per annum. The Aqua disposal saves £14 million of interest per annum and including the £96m of net cash payable to Tesco the interest saving is £8m per annum. The net cash payable will be funded from existing resources.

The Group’s proportionally consolidated weighted average interest rate is reduced by 15 basis points. The proportionately consolidated weighted average debt maturity is unchanged at 8.9 years. The transaction increases LTV by 0.4%.

Net asset value per share is reduced by 3 pence per share principally due to the impact of mark to market on the debt.

 

Categories: Finance, M&A


You Might Also Like
Read Full PostRead - Eye Icon
Biocon to go Ahead with Syngene IPO, Listing Likely in July
Finance
19/05/2015Biocon to go Ahead with Syngene IPO, Listing Likely in July

Biotechnology major Biocon on Wednesday filed a prospectus with market regulator Securities and Exchange Board of India (Sebi) for the Initial Public Offer (IPO) of its research arm, Syngene, through which it aims to raise around Rs 600 crore for funding resea

Read Full PostRead - Eye Icon
Modern Business Models You Need to Know
News
06/01/2022Modern Business Models You Need to Know

Remember when the only way to shop was in person? Excluding catalog shopping, going to the store was the only way to shop. But as time passed, something started to change. Innovation took hold and revolutionized the way we do just about everything. Business mo

Read Full PostRead - Eye Icon
5 Things You Should Know Before Buying Your First Cryptocurrency
News
06/11/20235 Things You Should Know Before Buying Your First Cryptocurrency

Cryptocurrencies are fairly new in the investment world and raise some worry as a result.Plenty of websites offer advice for your first-time crypto purchase. Nonetheless, this remains a rather fresh investment opportunity, bringing along a degree of caution. E

Read Full PostRead - Eye Icon
Leading Adviser in Nigeria
Leadership
16/05/2016Leading Adviser in Nigeria

Adebola Sobanjo & Co is a private company established in 1980 without any foreign equity but with a turnover of $800,000 – 1 million per year.

Read Full PostRead - Eye Icon
Expert Advice When You Need It
Finance
06/06/2017Expert Advice When You Need It

Leading Advisors of the Year - Property Investment Advisor of the Year – UK award winner Intercorp Group is a privately owned high-level consulting firm, which provides tax, estate planning and fiduciary structure solutions to high-net-worth families. To cel

Read Full PostRead - Eye Icon
Apple Watch App Technology Spreads its Net Wider
Innovation
26/10/2015Apple Watch App Technology Spreads its Net Wider

Montgomery County Employees Federal Credit Union Introduces Apple Watch App Technology

Read Full PostRead - Eye Icon
Reasons for LTD Claim Denials for Covid-19 Long Haulers
Legal
27/09/2021Reasons for LTD Claim Denials for Covid-19 Long Haulers

Covid-19 rapidly spread across the world and became a global pandemic. Hundreds of millions of people became infected, with millions being forced to take a leave of absence from their jobs due to symptoms.

Read Full PostRead - Eye Icon
Navigating the Legal Landscape: Unravelling the Intricacies of Company Merging in Poland
News
05/02/2024Navigating the Legal Landscape: Unravelling the Intricacies of Company Merging in Poland

In the ever-evolving landscape of global business, company mergers have become a strategic tool for growth and survival. Poland, with its dynamic business environment, has witnessed numerous successful company mergers that serve as valuable case studies for bu

Read Full PostRead - Eye Icon
Three Tips for Keeping Your Business’ Data Secure
News
21/07/2023Three Tips for Keeping Your Business’ Data Secure

Businesses worldwide are always looking for ways to improve the efficiency of their business and add more security. After all, there are many reasons for business owners to be concerned. There may be a lot of important data and information at risk.



Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

Arrow