British Land Plc said on Wednesday it had sold a 75% stake in three buildings in London’s West End for 401 million pounds ($538.8 million), as real estate developers struggle with a slowdown in office lease renewals and rent collections.
Restrictions to stem the spread of the novel coronavirus have begun to show up in the results of UK property firms, at a time when the market is also facing the uncertainties generated by Brexit.
British Land last month announced a sharp widening of losses and warned of more problems for the office and retail sectors while resuming dividend payments on the back of property sales that have boosted its finances.
The company, which owns a mixture of offices and malls, said the assets sold to Allianz Real Estate did not align with its core focus on mixed use London properties. Shares in the company, which has now sold 1.1 billion pounds worth of assets this year, rose 1.6% in early trade.
The owner of the Broadgate shopping and office complex in London said the deal represented a “blended” net initial yield of 4.32%, a premium to its Sept. book value.
British Land and Allianz will also form a joint venture in which the developer will keep managing the three buildings in exchange for a fee.