Land Securities and British Land announced the creation of the Scottish Retail Property Limited Partnership, a joint venture that will include the shopping centre assets of both companies in Aberdeen and East Kilbride.
The 50/50 Partnership between the two companies will initially own over 1.4 million sq ft (130,000 m2) of retail space, valued at approximately £500m. These assets currently produce gross rents of circa £32m per annum from over 330 tenancies. British Land will be undertaking the administration role for the Partnership, with Land Securities providing the asset and property management services by integrating the assets into its existing management infrastructure in Scotland.
The creation of the Partnership provides benefits of scale and enables the partners to maximise the long-term value of the centres. The partners will increase their ability to attract and service high quality tenants. Forming the Partnership will enable the partners to manage the assets with maximum efficiencies. In due course, the Partnership plans to create a joint development plan for the assets to provide an enhanced environment for shoppers and retailers.
In Aberdeen, Land Securities’ Bon Accord Centre and British Land’s St Nicholas Centre make up the current prime retail pitch between the John Lewis store and Union Street. Plans here include providing more retail floor space to accommodate current requirements and to improve the connectivity and public realm in the city centre.
In East Kilbride, British Land will be contributing the Plaza Centre and the recently completed Centre West, which houses retailers such as Debenhams, Next, Zara, French Connection and HMV. Land Securities will contribute Princes Mall and Olympia which, alongside a strong line-up of retailers, also includes a multi-screen cinema, library, ice rink, food court and restaurants. A co-ordinated asset management and tenant mix strategy will strengthen the entire town and make it more attractive to a wider catchment to the South of Glasgow.
Ian Henderson, Group Chief Executive of Land Securities commented, “Partnerships like this make sound business sense. This will serve the local community very much better and, by using our property and asset management expertise, we can leverage economies of scale and enhanced value creation opportunities, both of which will assist us to maximise our investment returns.”
John Ritblat, Chairman of British Land, added, “This Partnership makes strategic sense for British Land and Land Securities. The partners will benefit from joint ownership of larger assets with enhanced potential for value creation and Aberdeen and East Kilbride will benefit from the combined firepower of British Land and Land Securities, a team that is committed to improving the centres.”
Land Securities was advised by Slaughter & May and Dundas & Wilson.
British Land was advised by SJ Berwin, Semple Fraser and Henderson Boyd Jackson.
Other advisors include Eric Young & Co. and Montagu Evans for Land Securities and Donaldson’s and Colliers CRE for British Land.