GIC Acquires 77 Per Cent Share in The Bulk of British Land Paddington Central Properties For 694 million Pounds

British Land recently announced the sale of 75% of its Paddington Central assets to Singapore's sovereign wealth fund GIC for 694 million pounds (USD 885.9 million), with the UK-based landlord seeking to invest in high-growth industrial sites.

Commercial landlords have suffered over the last two years, as several COVID lockdowns and a prolonged embargo on rent collection have harmed retail-oriented properties, while a move toward remote work has harmed office portfolios.

Paddington Central is a mixed-use development in London that consists mostly of office space but also includes retail and entertainment buildings. 

It is home to corporations such as Microsoft (MSFT.O), Visa (V.N), and Prudential (PRU.L).

The selling price was 1% less than the assets' September 2021 book value, resulting in a net initial yield of 4.5 percent, a critical ratio in real estate deals.

British Land said in a statement that proceeds from the deal would be spent in value-adding development possibilities throughout its portfolio as well as in growth sectors such as development-led urban logistics in London and innovation campuses.

Due to growing demand from quick delivery ecommerce companies that need modest urban fulfilment centres, warehousing or logistics businesses seem to be a safer proposition for commercial property enterprises.

The transaction constituted a joint venture with GIC owning 75% of the combined assets and British Land owning the other 25%. British Land's shares fell roughly 1.8 percent in early session.

British Land said that two properties on the Paddington Central campus, The Novotel at 3 Kingdom Street and the construction site at 5 Kingdom Street, are outside the joint venture at the moment.