British Land has made a bold move to increase its exposure time UK retail parks by raising £300m to help fund the acquisition of seven sites.
The high street is dead, and it has been for some time. That said, out of town retail parks are proving to be increasingly popular.
The mix of shopping and leisure experiences in retail parks that consumers can easily drive to have stolen the footfall of UK shoppers and British Land is realigning its portfolio accordingly.
The seven sites will considerably increase British Land’s weighting towards retail and generate the Real Estate Investment Trust 6.7% in net yields initially.
British Land raised cash for the acquisitions by way of a placing at a 3.6% discount to yesterday’s closing price.
“British Land has raised around £301mn from investors to help fund the purchase of seven retail parks for £441mn. Sites like this now make up around 32% of the entire portfolio, up from 18% just 18 months ago, and are core to British Land’s expansion strategy,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“There are two key takeaways here. The first is that the ongoing consumer shift from the high street to out-of-town retail locations is clearly a trend that companies are trying to take advantage of – we heard from Greggs earlier this week who is taking this approach for new store locations. The second is that the large-scale acquisition market for property giants is back open, after a period of low activity.”