British Land will cut £3m off its interest bill from a £1bn refinancing of its Meadowhall shopping centre in Sheffield.

It is currently securitised through Meadowhall CMR Finance and will be refinanced for £1.015bn through Meadowhall Finance PLC, a wholly owned subsidiary of British Land.

The proposed refinancing will have a weighted average interest rate ofapproximately 4.9%.

The refinancing deal is similar to early structures put in place for BL’s Broadgate scheme in London in March 2005 for £2.1bn and earlier this year in February for its £750m securitisation of its supermarket portfolio known as ‘BL Superstores’.

BL’s group interest costs will be reduced by £3m a year while financing costs of Meadowhall will shrink from 5.5% to 4.9% following the deal.

Meadowhall is a large chunk of the groups total portfolio and the refinancing drops the groups weighted average cost of debt by nearly 10 basis points.

Graham Roberts, finance director of British Land, said: ‘This major refinancing of Meadowhall unlocks significant additional value for bondholders and British Land. Bondholders will benefit from a simplified structure and significant rating improvements; for shareholders there is improved financing flexibility, prior to our anticipated change to REIT status, allowing reduced interest charges going forward.’