By Andy Silvester
Property developer British Land is considering selling a number of its assets to US real estate group Realty Income, reports say.
The potential £300m deal would involve selling a portfolio of six London-based data centres and offices, currently leased to Vodafone, and three shopping centres, according to The Sunday Times.
Realty first entered the UK market when it entered a joint ownership with British Land of 12 Sainsbury’s supermarkets for £429m in 2019.
Both British Land and Realty declined to comment when contacted by The Sunday Times.
Since then, it has aggressively expanded its portfolio with more supermarkets, DIY stores and more than 30 retail parks, totalling to more than £2bn worth of investment.
The US company, which is led by former investment banker Sumit Roy, has said previously to investors that the UK’s dense, growing population and constraints on new retail development make it an attractive long-term investment hotspot.
A £100m price tag was put on British Land’s data centre and office portfolio last month with bids due in this week.
Realty hopes to be in for a chance of acquiring the assets alongside Inverness Shopping Park, the Kingston Centre in Milton Keynes and Serpentine Green in Peterborough, also from British Land.
British Land shares have fallen by 22% this year as pressure from higher interest rates has triggered a sell-off in the real estate sector. Other factors include the rise of flexible working and the looming cost of adjusting environmental standards to meet new building regulations.
British Land fell out of the FTSE 100 and into the FTSE 250 in June after a 21-year run in the UK’s blue chip share index.
However, occupancy rates remain higher than some analysts expected in the immediate post-pandemic period and new developments in Paddington and Canada Water, as well as the City’s Broadgate campus, are providing positive momentum.
