Developer acquires string of shopping centres and retail parks

British Land has announced it has completed a £733m property swap transaction with Tesco, selling 21 standalone foodstores in exchange for Tesco-anchored shopping centres and retail parks.

British Land said the shopping centres and retail parks acquired had “significant potential to add further value through asset management and development.”

The sites acquired include the Serpentine Green shopping Centre in Peterborough and the Beaumont Leys shopping centre in Leicester.

As part of the transaction, Tesco receives £96m from British Land.

Charles Maudsley, head of retail and lesiure at British Land, said: “This mutually beneficial transaction clearly demonstrates the great relationship we enjoy with Tesco. It plays to our strengths of managing multi-let assets and gives Tesco more control of their stand-alone portfolio.”

Dave Lewis, Tesco chief executive, said: “Last year we identified the opportunity to increase the proportion of our stores we own as freehold. This transaction with British Land allows us to increase our ownership and thereby insulate more of our businesses from indexed rent reviews. We have a long way to go but it’s a transaction which takes us in the right direction. This agreement makes our business simpler and stronger.”

Overview of Assets in Swap Arrangement

3 Shopping Centres:
- Serpentine Green, Peterborough. 320,000 sq ft shopping centre anchored by 140,000 sq ft Tesco with a strong fashion line-up including Arcadia, Next, River Island and H&M. Potential for expansion of retail offering through development.
- Beaumont Leys, Leicester. 310,000 sq ft shopping centre anchored by a 150,000 sq ft Tesco.
- Lisnagelvin, Londonderry. 100,000 sq ft scheme anchored by a 60,000 sq ft Tesco and a 25,000 sq ft Primark.

3 Retail Parks:
- Kingston Centre, Milton Keynes. A 270,000 sq ft open A1 retail park anchored by a 140,000 sq ft Tesco and including Next, Marks & Spencer, Boots and Mothercare.
- Clifton Moor, York. A 240,000 sq ft mix of open A1 and bulky planning consents anchored by a 120,000 sq ft Tesco. Recently completed terrace let to DFS, Wren, Oak Furnitureland and Harveys.
- Woodfields Retail Park, Bury. A 150,000 sq ft retail park anchored by an 85,000 sq ft Tesco and including Next and Boots.

3 Stand-alone Foodstores (on open market rent reviews):
- Bursledon, Southampton. A 120,000 sq ft store, affluent catchment and lease recently re-geared to 15 years.
- Grove Green, Maidstone. A 60,000 sq ft store with 5 unit shops and an affluent demographic.
- Bromley by Bow, London. A 70,000 sq ft store.

Sale of 50% share of Aqua
- A portfolio of 21 geographically diverse stand-alone foodstores (c.25% South).
- All leases have 13.3 years unexpired term and are subject to annual RPI increases.