British Land exchanges on the disposal of £429m of Sainsbury’s superstores
British Land has exchanged on the sale of 12 superstores from its joint venture with Sainsbury’s for £429m, representing a net initial yield of 5.0%, to Realty Income Corporation. BL’s share of the proceeds will be £193.5m1, representing a modest premium to September 2018 book value, with net proceeds of £95m after repayment of debt.
BL said this is the latest example of how it is delivering against its 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. As part of this, BL expects retail to fall to 30-35% of its assets, down from around half today.
Already, BL has exchanged or completed on nearly £1bn of retail assets sales since April 2018 at an average yield of 5.7% on terms marginally ahead of book value. Disposals included the Debenham’s Clapham store and the Spirit pubs portfolio.