REG - British Land Co PLC - Joint venture with Royal London Asset Management

British LandAnnouncement

18/03/2024 07:00

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RNS Number : 1414H  British Land Co PLC  18 March 2024

BRITISH LAND AND ROYAL LONDON ASSET MANAGEMENT ANNOUNCE JOINT VENTURE TO
DELIVER WORLD CLASS SCIENCE AND INNOVATION BUILDING AT 1 TRITON SQUARE

British Land and Royal London Asset Management Property ('Royal London Asset
Management') announce the formation of a new 50:50 joint venture ('JV') to
accelerate the delivery of 1 Triton Square into a best in class science and
innovation building at Regent's Place. The agreement values 1 Triton Square at
£385m.

The new JV will combine British Land and Royal London Asset Management's
development and asset management capabilities to deliver a world class science
and innovation building. The design is highly flexible, offering a mix of
fitted and lab-enabled space as well as the potential to incorporate serviced
offices to accommodate flexible requirements at the lower levels, whilst
retaining best in class office space on upper floors.

1 Triton Square is located in the heart of the Regent's Place campus within
London's Knowledge Quarter, which is home to leading research institutions
including The Francis Crick Institute, The Wellcome Trust, The Alan Turing
Institute and University College London. The campus' location within this
well-established innovation ecosystem makes it well positioned to capture the
growing space requirements from these businesses.

The transaction delivers against one of British Land's key strategic
priorities to actively recycle capital, with proceeds being reinvested into
future developments. The establishment of this JV partnership accelerates and
enhances returns.

The JV marks an important milestone for Royal London Asset Management's
property team as it builds on its existing life sciences and innovation
platform across the Golden Triangle of London, Cambridge and Oxford.

Royal London Asset Management is committed to responsible property investment
across its portfolio. The strategy to reposition the existing asset at 1
Triton Square into a high-performing innovation centre aligns with this
approach and reinforces the team's core strategic objectives to maximise value
and deliver long-term, sustainable solutions to meet evolving occupier needs.

Simon Carter, Chief Executive of British Land, said: "We are delighted to be
working with Royal London Asset Management to deliver a world class science
and innovation building at Regent's Place.

We proactively took 1 Triton Square back from Meta to reposition it for
science and innovation customers, with the expectation of unlocking
significantly higher rents, whilst benefitting from a considerable surrender
premium to further improve the economics.

This transaction is another example of how we drive value through establishing
innovative JV partnerships, enabling us to flex our balance sheet, share the
risk and crystallise the value created from Meta's surrender premium."

Mark Evans, Head of Property and Commercial Development at Royal London Asset
Management Property, said: "We are thrilled to join forces with British Land
to reposition 1 Triton Square for the science and innovation market. The
partnership opportunity aligns with our wider strategy to leverage our
platforms in new markets and continue to deliver on our commitment to
purposeful investment.

We have long recognised the demand for best-in-class science and innovation
space, particularly in the Golden Triangle, and the need for this space in
supporting the UK's economic growth. In testament to this strategic vision
Royal London Asset Management has established 1.5m sq ft of holdings to meet
these needs over the past 10 years. 1 Triton Square will increase our holdings
to over 2.0m sq ft and will form a core part of our wider portfolio as we
position life sciences and innovation as a core platform for further
investment."

Financial effects for British Land

British Land will receive gross proceeds of £192.5m from the sale of a 50%
share in addition to £149m surrender premium already received from Meta. The
combined impact of the surrender premium, JV formation and subsequent fit-out
and leasing is expected to deliver a 30%+ IRR. The 50% disposal will result
initially in a c.2p increase in NTA per share and due to the pay down of debt
and the related interest saving increases FY25 EPS by c.1p. The transaction
reduces LTV by 1.4%, largely mitigating development capex incurred across the
business in H2 FY24 on our 1.9m sq ft committed programme.

-  ENDS -

Investors:

 Sandra Moura, British Land                    07989 755 535

 Will Hawking, Royal London Asset Management   07919 170 915

 

Media:

 Charlotte Whitley, British Land                                                      07887 802 535

 Hannah Beer, ING Media (Royal London Asset                           07548 099688
 Management)

 

About British Land

Our portfolio of high quality UK commercial property is focused on London
Campuses and Retail & London Urban Logistics assets throughout the UK. We
own or manage a portfolio valued at £12.7bn (British Land share: £8.7bn) as
at 30 September 2023 making us one of Europe's largest listed real estate
investment companies.

We create Places People Prefer, delivering the best, most sustainable places
for our customers and communities. Our strategy is to leverage our best in
class platform and proven expertise in development, repositioning and active
management, investing behind two key themes: Campuses and Retail & London
Urban Logistics.

Our three campuses at Broadgate, Paddington Central and Regent's Place are
dynamic neighbourhoods, attracting growth customers and sectors, and offering
some of the best connected, highest quality and most sustainable space in
London. We are delivering our fourth Campus at Canada Water, where we have
planning consent to deliver 5m sq ft of residential, commercial, retail and
community space over 53 acres. Our Campuses account for 62% of our portfolio.

Retail & London Urban Logistics accounts for 38% of the portfolio and is
focused on retail parks which are aligned to the growth of convenience, online
and last mile fulfilment. We are complementing this with urban logistics
primarily in London, focused on development led opportunities.

Sustainability is embedded throughout our business. Our approach is focused on
three key pillars where British Land can create the most benefit: Greener
Spaces, making our whole portfolio net zero carbon by 2030, Thriving Places,
partnering to grow social value and wellbeing in the communities where we
operate and Responsible Choices, advocating responsible business practices
across British Land and throughout our supply chain, and maintaining robust
governance structures. Further details can be found on the British Land
website at www.britishland.com (http://www.britishland.com) .

 

About Royal London Asset Management Property

Royal London Asset Management Property is a key player in the UK commercial
property market, operating across six key sectors: offices, retail, industrial
and logistics, residential, healthcare and alternatives.

The team is part of Royal London Asset Management, one of the UK's leading
fund management companies, providing investment management solutions to both
wholesale and institutional clients such as not-for-profit organisations,
local authorities and the insurance sector.

Visit Responsible property investment | Institutional | RLAM
(https://www.rlam.com/uk/institutional-investors/our-capabilities/property/responsible-property-investment/)
to learn more.

 

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