Acquisition
British Land Co PLC
14 February 2005
14th February 2005
BRITISH LAND INVESTS IN 23 DEBENHAMS DEPARTMENT STORES
______________________________________________________
The British Land Company PLC has exchanged contracts for a transaction
encompassing 23 freehold and long leasehold Debenhams department stores
totalling 3.28 million square feet for a value of some £495 million. Completion
will bring the value of British Land's retail property portfolio to over £6.4
billion (based on September 2004 values and subsequent acquisitions).
The stores are located in prime positions on high streets in major cities and
towns throughout the country, including London (Oxford Street), Manchester,
Cardiff and Chester. A full list is attached as Note 1.
They are leased to Debenhams for a term of 30 years from March 2004 (35 years in
the case of Oxford Street and Manchester) at a total rent of £27.9 million per
annum from March 2005. The rent increases annually by 21/2% compound (except
for the four years from March 2010 when it increases annually by 3%), with a
review in March 2019 and five yearly thereafter to the higher of market rent or
the initial rent as grown by 21/2% per annum. The tenant has an option to renew
at the end of the lease for a further 25 years with a rent reviewable at five
yearly intervals to market rent.
The transaction will be financed at rates of approximately 5.1% from existing
cash and debt facilities, including the £500 million additional long-term bond
finance currently being finalised as part of the (unrelated) Broadgate
refinancing.
Stephen Hester, British Land Chief Executive comments:
"This well let portfolio has guaranteed annual uplifts throughout a minimum
term of 30 years, and potential for additional rental growth, plus an initial
income return of 5.6%. We believe the 23 stores, leased to one of the leading
department store operators in the UK, provide an excellent addition to British
Land's retail portfolio. The secure income growth is expected to be increasingly
valuable with various asset management opportunities on top and in a sector well
known to us. "
Enquiries:
The British Land Company PLC
Bob Bowden, Investment Director Tel: 020 7467 2892
John Weston Smith, Chief Operating Officer Tel: 020 7467 2899
Finsbury
Edward Orlebar Tel: 020 7251 3801
Notes to Editors
Note 1
______
The properties are: Gross Internal Tenure
Floor Area
(square feet)
Bournemouth - Commercial Road 106,188 Freehold
Canterbury - Guildhall Street 116,494 Freehold
Cardiff - St. David's Centre 140,325 Virtual Freehold
Chelmsford - High Street 126,973 Freehold
Chester - Eastgate Street 153,268 Freehold
Eastbourne - Terminus Road 104,709 Freehold
Harrow - Station Road 225,208 Leasehold
King's Lynn - High Street 46,602 Freehold
Kingston upon Hull - Prospect Street 177,127 Freehold/Part
Leasehold
London - Oxford Street 366,706 Freehold
Luton - George Street 61,317 Freehold
Manchester - High Street 466,540 Virtual Freehold
Oxford - Magdalen Street 139,918 Leasehold
Salisbury - Blue Boar Row 59,116 Freehold
Sheffield - The Moor 213,842 Leasehold
Southampton - Queensway 285,303 Freehold
Southport - Lord Street 64,356 Freehold
Staines - High Street 113,367 Freehold
Stockton - High Street 40,727 Freehold
Stratford upon Avon - High Street 92,982 Freehold
Taunton - North Street 86,911 Freehold
Winchester - High Street 50,612 Freehold
Worthing - South Street 44,898 Freehold
------------
3,283,489
Note 2
______
British Land have been advised by Dalgleish. Lazard acted as financial adviser
to Debenhams on the transaction.
This information is provided by RNS
The company news service from the London Stock Exchange
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