British Land has sold a €300m (£224m) portfolio of European retail properties to Henderson Global Investors, and will use the cash to buy from distressed sellers.
PREF, the closed-ended out-of-town retail property fund part-owned and advised by British Land, has completed a deal with HERALD, the Henderson European Retail Property Fund, for the sale of five European retail parks totalling 760,000 sq ft, as well as 50% of PREF's stake in the Spanish regional shopping centre, Nueva Condomina in Murcia.
Cut price assets
In a sign that some of properties major players believe prices have bottomed out, British land said it had made the sale so it could take advantage of cut price assets.
‘The sale boosts [PREF’s] available buying firepower from a previous €200 million to circa €500 million, ready for selective opportunistic purchases that we feel will arise from prevailing economic conditions in the forthcoming year,’ Valentine Beresford, director of BL European Fund Management, said. ‘It also enables PREF to focus on its core countries while reducing the fund's exposure to a large, single asset.’
The retail parks, located in Italy, Belgium and Switzerland, are being acquired for a consideration of €154 million, reflecting a combined net yield of 5.2%. The stake within Nueva Condomina, which represents 41.25% of the whole is being sold for €143 million which reflects a net initial yield of 4.5%.
British Land retains its 17.5% direct holding in the Nueva Condomina joint venture while PREF (40% owned by British Land) and HERALD will each own 41.25%. Henderson European Retail Property Fund Management will have a joint asset management role with BL European Fund Management in running the Murcia Shopping Centre and Retail Park.