British Land off on £1bn acquisitions trail
The London property market has received a huge boost as one of the capital's biggest landlords, British Land, raised £1bn to spend on acquisitions and new developments.
The country's second largest property company tapped its shareholders for £500m through a share placing and sold Ropemaker Place in the City for £472m.
"It's very good news for London," said Chris Grigg, chief executive of British Land. "We've got a lot of interest in the share placing and confirmation from shareholders that this is exactly the type of thing they want to see British Land doing."
The company said the share placing would be used to fund £123m of deals it has already done, a further £150m which are in advanced negotiations, and the rest on a "growing pipeline of opportunities".
British Land shares dropped 25.5p to 555p as Goldman Sachs, Morgan Stanley and UBS went about placing the 90 million new shares being offered. That represents 9.9 per cent of British Land's existing share capital.
Ropemaker Place was completed in 2009 and is home to a number of City firms including The Bank of Tokyo-Mitsubishi, Markit, Liberum Capital and Macquarie Group. It yields £24m a year in rents, rising to £27.5m at the next reviews.
Mr Grigg said: "This is a very large building even by London standards. This sale is absolute confirmation that we see continued good demand in the London office market. For prime London property we've been out of the recession for some time."
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