LONDON -- British Land (BLND 0.21%) has announced that it is set to offer up to 89.7 million new ordinary shares to both existing and new institutional investors, in order to raise funds for "attractive investment opportunities."
The property group is hoping to raise circa 500 million pounds, with 213 million pounds going toward recent acquisitions and a further 150 million pounds in advanced negotiation, and a growing pipeline of identified opportunities in its core sectors in London and the South East.
This morning's statement said that British Land "believes that this placing will provide it with additional investment capacity, enabling it to capitalise upon its scale and financial strength to drive future growth in earnings and returns."
It continues the company's strong track record of delivering value from disciplined investment activity, which has seen 2 billion pounds worth of acquisitions and developments deliver 16% unlevered internal rate of return over the last three years.
Meanwhile, the property group also revealed that it has sold the iconic Ropemaker Place in the City to an international consortium of investors represented by AXA Real Estate Investment Managers for a gross sale price of 472 million pounds. The proceeds from the sale will be reinvested into a London-focused committed development program.
Head of Offices at British Land, Tim Roberts, commented:
Ropemaker demonstrates our track record of delivering exceptional, sustainable buildings which are profitably let to quality occupiers. The sale reflects the attractiveness of our buildings to investors as well as occupiers and allows us to recycle capital to invest in our development programme.
British Land is set to receive net proceeds of 461 million pounds in cash from the sale, 1.4% above the 455 million-pound book value as at September 2012. Management stated that the sale was in line with its strategy of recycling capital and balancing its portfolio between the West End and the City, with the West End now accounting for half of its London office portfolio, which previously stood at 46%.
Shares in the group dipped on the news, falling 17.50 pence (3%) to 563 pence. At today's price, British Land currently offers a 4.5% yield, ahead of the FTSE 100 average, with the dividend covered 1.1 times.
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