British Land acquires seven more retail parks in a £441m deal

The landlord has agreed to a £441m deal for seven retail parks across the UK from Canadian property investor Brookfield Asset Management. It said part of this acquisition will be funded by a £300m equity placing.

British Land has placed retail parks at the centre of its strategy and chief executive Simon Carter has said he likes them because of what he calls “the three As”: affordability, adaptability and accessibility.

“We started buying [retail parks] in 2021 and since then they have been the best-performing part of UK real estate,” Carter told The Times. “Multichannel retailers have quickly worked out that a retail park is the best physical format for filling online [orders].”

The seven retail parks bought by British Land are all 99% let and Carter said the sites “trade very well”.

The locations are: Falkirk, Middlesbrough, Merthyr Tydfil, Rugby, Telford, Waterlooville and Nottingham.

Because of the occupancy rates, British Land said it is confident retail park rents will continue to rise, in stark contrast to other parts of the commercial property market.

The Times reported that British Land’s shares trade at about a 20% discount to net asset value, which has made it tougher for landlords to convince investors to back new projects with their money.

“In the past, shareholders have said to us that if you find something with good returns, then please do have a conversation with us. What’s really exciting is [this deal is] earnings accretive — that’s what they’re focused on,” said Carter.