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British Land

British Land to sell 12 retail superstores from its joint venture with Sainsbury's for £429mln

The group said the move is part of its long term strategy to reduce its Retail exposure to comprise around 30-35% of its business assets, down from around 50% currently

Sainsbury's store
It added that, once the transaction completes - which is expected at the end of May – retail superstores exposure will fall to 1.3% of its portfolio

British Land PLC (LON:BLND) is expected to receive net proceeds of around £95mln after the sale of 12 superstores from its joint venture with J Sainsbury PLC (LON:SBRY) on which it has exchanged contracts for £429mln, as it continues to reduce its exposure to retail businesses.

The FTSE 100-listed real estate group said its share of the proceeds of the planned disposal to Realty Income Corporation will be £193.5mln, representing a modest premium to September 2018 book value and a net initial yield of 5.0% from the joint venture.

READ: British Land chairman to step down at July AGM

The group said the move is part of its long term strategy to reduce its Retail exposure to comprise around 30-35% of its business assets, down from around 50% currently.

It added that, once the transaction completes - which is expected at the end of May – retail superstores exposure will fall to 1.3% of its portfolio, based on September 2018 valuations, with six standalone stores remaining. 

British Land said its long-term strategy is to build an increasingly mixed-use business focused on three core elements: campus-focused London offices; a smaller, refocused Retail business and Residential, principally build-to-rent.

As a result, it pointed out, it has exchanged or completed on nearly £1bn of retail assets sales - £646m being the group’s share - since April 2018 at an average yield of 5.7% on terms marginally ahead of book value. 

The group concluded: “We have a clear view of the value of our assets and despite the clear challenges currently in the retail market, we remain opportunistic and proactive.”

Quick facts: British Land

Price: £4.80

Market: LSE
Market Cap: £4.47 billion
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