British Land has sold 12 supermarkets from its joint venture with Sainsbury’s to Realty Income Corporation for £429m, representing a net initial yield of 5.0%.
Its share of the proceeds will be £193.5m, representing a modest premium to September 2018 book value.
Going forward, British Land said it expected retail to comprise around 30-35% of its assets, down from around half today.
The REIT said: “This is the latest example of how we are delivering against our clear 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.
“We have a clear view of the value of our assets and, despite the clear challenges currently in the retail market, we remain opportunistic and proactive. As a result, we have exchanged or completed on nearly £1bn of retail assets sales (£646m our share) since April 2018 at an average yield of 5.7% on terms marginally ahead of book value. This activity has included the sale of Debenhams Clapham and the Spirit pubs portfolio.”
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