British Land raises £301m in placing for retail parks acquisition

3rd Oct 2024 07:25

(Sharecast News) - British Land said on Thursday that it had raised £301m in an equity placing to help fund the acquisition of a portfolio of seven "high quality" retail parks.

The company announced late on Wednesday that it had agreed to buy the retail parks from Brookfield for £441m. British Land said the remainder of the consideration would be financed from existing cash and in place facilities.

The retail parks total around 1.9 million square feet. Occupancy is 99% and the weighted average unexpired lease term is 4.5 years to break and 5.9 years to expiry.

British land said the parks are let "to successful multi-channel and essential retailers with strong covenants and all benefit from a major superstore anchor".

The company placed just over 69.5 million shares at 422p each, which is a 3.6% discount to the closing share price on Wednesday. The placing was coordinated by Morgan Stanley and UBS.

Chief executive Simon Carter said: "The acquisition of this high quality portfolio builds upon our market leading position in retail parks. Parks remain the preferred format for retailers and we have deployed £711m of capital into this subsector since 1 April 2024.

"These assets offer an attractive yield and strong rental growth prospects in line with our guidance of 3-5%. Combined with the proposed placing, they will be immediately earnings accretive and are expected to deliver double digit ungeared IRRs.

"The broader business also continues to trade well with a good level of leasing in the period and cost discipline underpinning our profit performance. We expect portfolio values to be marginally up for the half year, with continued ERV growth across the portfolio."