Share in Hercules Unit Trust to Increase
British Land to Increase Share in Hercules Unit Trust
British Land announces that it has agreed to purchase £41 million of additional units in Hercules Unit Trust ("HUT") at a price of £613 per unit, 3.8% below latest NAV, as part of a scheduled pre-emption process. British Land has also submitted an application to Schroder Property Managers (Jersey) Ltd, the manager of HUT, to acquire up to £35 million of further units in HUT which have been tendered as part of this process.
HUT is the UK's largest specialist retail park property unit trust with a portfolio of £1.5 billion and contracted net rent of £86.5 million as at 31 December 2013. The portfolio comprises 17 retail parks across the UK including Glasgow Fort Shopping Park and 50% of Fort Kinnaird Shopping Park, Edinburgh. The parks attract a diverse range of occupiers including Arcadia, Asda, Boots, Marks & Spencer, Next, Sports Direct and TK Maxx. British Land is the property adviser to HUT.
When British Land acquires the minimum amount of £41 million to which it is entitled under its pre-emption rights, its share in HUT will increase to 54.2% from its current level of 49.2%. The purchase of the HUT units will be accretive to British Land's earnings.
As a result of British Land increasing its interest over the activities of HUT, HUT will be treated as a subsidiary and consolidated in British Land's accounts from 31 March 2014. This includes HUT's debt, all of which is non-recourse to British Land. The Group's proportionally consolidated LTV will rise by a maximum of 0.7 percentage points to 43% and its statutory LTV will rise by a maximum of 3.4 percentage points to 31% (compared to 31 December 2013 pro-forma).
British Land cannot be certain as to how many units it will be successful in acquiring in the tender process above its pre-emptive allocation. An update providing details of the value of the units acquired and the balance sheet effects will be made once the number of units acquired is confirmed.
Charles Maudsley, Head of Retail at British Land, said, "HUT has some of the highest quality retail parks in the country. The purchase of additional units is in line with our strategy of focusing on retail locations which are the preferred local destination for shoppers, are flexible, affordable and capable of remaining at the heart of retailers' omni-channel offer."
Enquiries:
British Land
Investor Relations
Sally Jones, British Land 0207 467 2942
Media
Pip Wood, British Land 020 7467 2838
Gordon Simpson, Finsbury 020 7251 3801
Notes to Editors
About British Land
British Land is one of Europe's largest Real Estate Investment Trusts (REITs). Through our property and finance expertise we attract experienced partners to create properties and environments which are home to over 1,000 different organisationsand receive over 300 million visits each year. Our property portfolio is focused on the UK, in prime retail locations and London offices which attract high quality occupiers committed to long leases. We have total assets in the UK, owned or managed, of £17.1 billion (British Land share £11.2 billion), as valued at 30 September 2013. Our occupancy rate of 97% and average lease length to first break of 11 years are among the highest of the major UK REITs.
UK retail assets account for 59% of our portfolio, around 80% of which are located at prime out of town sites. Comprising around 25 million sq ft of retail space across 69 retail parks, 89 superstores, 17 shopping centres and 13 department stores and 77 leisure assets, the retail portfolio is modern, flexible and adaptable to a wide range of formats. Our active asset management delivers space which is attractive and meets the needs of both retailers and consumers. London offices, located in the City and West End, comprise 39% of the portfolio, which will rise to an estimated 41% on completion of current committed developments. Our 7 million sq ft of high quality office space includes Regent's Place and Paddington Central in the West End and Broadgate, the premier City office campus (50% share). Our size and substance demands a responsible approach to business. We believe leadership on issues such as sustainability helps drive our performance and is core to the delivery of our overall objective of driving shareholder value.
Further details can be found on the British Land website at www.britishland.com
This information is provided by RNS
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