British Land has sold 12 superstores from its joint venture with Sainsbury’s for €496m (£429m), representing a net initial yield of 5.0%, to Realty Income Corporation. The company's share of the proceeds will be €223.7m (£193.5m) representing a modest premium to September 2018 book value. The deal is in line with the British Land's long-term strategy 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.
Alongside investment into campuses and progressing unique development opportunities such as Canada Water, the company will continue to focus on selling retail assets which are not aligned to its strategy. So far, British Land has exchanged or completed on nearly €1.16bn (£1bn) of retail assets sales since April 2018 at an average yield of 5.7% on terms marginally ahead of book value. This activity has included the sale of Debenham’s Clapham and the Spirit pubs portfolio.
Once the transaction completes, which is expected at the end of May, the company's superstores exposure will fall to 1.3% with 6 standalone stores remaining. Net proceeds to British Land are expected to be c.€109.8m (£95m) following the repayment of debt and associated break costs.