Property Disposal
Kingfisher PLC
14 July 2006
Press Release
14 July 2006
KINGFISHER AND BRITISH LAND AGREE STORES DEAL
Kingfisher plc and The British Land Company PLC have agreed a deal on seven B&Q
Warehouse large format stores. Kingfisher plc has sold a subsidiary company,
which owns the seven stores, to The British Land Company PLC for a total cash
payment of £198 million.
The stores, all freehold, are in prime edge of town locations in Ashford, Bury,
Exeter, Glasgow, Grimsby, Lincoln and North Shields. The stores are
approximately 100,000 sq ft each and, in total, extend to nearly 700,000 sq ft.
The portfolio represents approximately 7 per cent of Kingfisher's total freehold
and long leasehold assets.
The stores are let at current market rental levels to B&Q PLC (Kingfisher's main
UK subsidiary) on 20-year leases with the tenant having an option to break after
15 years.
The leases have been structured to provide significant operational flexibility
through assignment, under-letting and alterations. The rent is payable monthly
in advance and will be uplifted annually in line with the change in the Retail
Prices Index, subject to a cap. This reflects B&Q's desire to align property
occupation costs more closely with the operating business environment. It will
limit B&Q's rental increases for the stores and protects the business from any
increases above the current rate of inflation. It also provides stability and
certainty of cashflow for B&Q.
Terry Hartwell, Group Property Director of Kingfisher, said: 'Through this
transaction, Kingfisher is taking advantage of the current buoyancy in the
direct property investment market in the UK to finance its operational business
at attractive rates going forward. The proceeds of the transaction will be used
to repay existing debt and to invest in Kingfisher's worldwide store opening
programme, including further freehold acquisitions.'
Bob Bowden, Property Investment Director, British Land, said: 'This purchase
lies within our core out of town retail expertise and adds to our portfolio of
index linked leases in which we see value.'
For further information:
Kingfisher: 020 7372 8008
Ian Harding, Group Communications Director
British Land: 020 7486 4466
Bob Bowden, Property Investment Director
Laura De Vere, Corporate Communications Director
Finsbury: 020 7521 3801
Faeth Birch
This information is provided by RNS
The company news service from the London Stock Exchange
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