British Land sells stake in three massive London offices for £401m

British Land (BLND.L) announced today it sold its 75% stake in a portfolio of three offices in London’s West End to Allianz Real Estate for £401m ($538.6m). Shares for the real estate management company ticked up roughly 1% Wednesday morning.

British Land’s CEO, Simon Carter, said the deal “demonstrates that like us, investors remain confident in the long-term prospects for high quality assets in prime London locations."

The company said in a statement that the deal also highlights its “commitment to recycle capital out of assets not aligned to our core focus on mixed use London campuses, providing greater flexibility to invest in developments, including Norton Folgate, which we committed to in November, and Canada Water, where we have planning permission for our 53 acre masterplan.”

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British Land, one of Europe's largest listed real estate investment companies, will form a new joint venture with Allianz, with British Land's interest at 25% and Allianz's at 75%. It will continue to manage all three buildings and will receive an asset management fee for this.

The portfolio includes three offices, 10 Portman Square, Marble Arch House and York House, all of which are in Marylebone in London.

The assets had a combined valuation of £508m, when valued at at 100%, at 30 September and the total net rent attributable to the properties is £21.1m.

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Kari Pitkin, head of business development for Europe at Allianz Real Estate, said the “transaction represents a great opportunity to invest in prime assets in a global city on behalf of our Allianz clients thereby broadening our UK investment portfolio."

Last month, British Land reported a fall in its underlying profit for the first half of 2020, with both its office and retail portfolio taking a hit due to lockdowns across the UK as a result of the coronavirus pandemic. Shares were down 4% as markets opened Wednesday morning.

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