The investment offers an attractive blend of income and capital return, with major development potential and significant future opportunity to improve the estate through asset management. On completion of the developments, British Land will own 1.0 million sq ft of a 1.6 million sq ft estate.
The highlights include:
• 3 modern buildings and a retail/leisure cluster totalling 610,000 sq ft let to major corporates; nearly 11 years average lease length; 91% occupancy
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• Income generating assets acquired for £400 million, a net initial yield of 5.3% on expiry of rent frees, rising to 6.2% when fully let.
• 2 sites with 355,000 sq ft of consented office development acquired on an effective price of £175psf; 80,000 sq ft of further potential development which reverts to British Land by 2018
• Well positioned to benefit from improving local infrastructure and regeneration
• Major London transport hub with strong links to Heathrow and the M4 corridor
• Opening of a new Hammersmith & City Line station in 2014
• New Paddington Crossrail station opening in 2018
Chris Grigg, Chief Executive, British Land, said: "We are delighted to have bought into Paddington Central. It is an investment which plays to our asset management and development strengths, is in line with our strategy of increasing exposure to London and replenishing the development pipeline, and one we expect to generate strong returns. This is the most significant acquisition we have made since the equity placing in March and we are confident that investment of those proceeds will now be accretive to 2014 earnings, ahead of our original objective."
(CD/MH)
