British Land nets £300m in office deal

Click to follow
The Independent Online

British Land is to receive more than £300m in cash under a deal to put four of its City properties into a joint venture with WestLB, the German bank.

British Land is to receive more than £300m in cash under a deal to put four of its City properties into a joint venture with WestLB, the German bank.

Britain's second biggest property company, which is headed by John Ritblat, will keep a 50 per cent share in the assets, but will receive £307.5m in cash from WestLB. British Land will also collect management fees from the joint venture for running the properties.

John Weston Smith, British Land's finance director, said: "This is a very nice cash extraction job for us. We are realising around £100m more than the cost of these properties and still keeping a half share."

The WestLB deal is British Land's 13th joint venture. In many of these arrangements, a retailer or other property owner is providing the assets involved, giving British Land access to property not otherwise on the market. Before yesterday, property worth £1.2bn was held under such arrangements, out of British Land's £8bn gross property assets, with partners including Tesco, Scottish & Newcastle and Great Universal Stores.

The properties put into the WestLB joint venture provide a total of 614,000 sq ft of office space. All in the Square Mile, the properties are 100 New Bridge Street, which houses law firm Baker & McKenzie, 1 Fleet Place, 10 Fleet Place and Watling House in Cannon Street.

The money raised from the WestLB transaction will be used by British Land to complete two large City schemes which are in development, the 68,000 sq ft building at 201 Bishopsgate and the 656,000 sq ft scheme at Plantation Place.

It is thought that next year British Land will look at refinancing one of its largest assets, Meadow Hall, the giant shopping centre near Sheffield. This may also be put into a joint venture. Other options include securitising its rental income.

Comments