LONDON, UK: British Land has announced the sale of 50% of British Land’s share in the Canada Water Masterplan to AustralianSuper for £290 million.
Following completion of the sale, British Land and AustralianSuper formed a 50:50 joint venture to accelerate the delivery of this 53 acre development, which is one of the largest and most sustainable London regeneration projects in history. This transaction values British Land’s interest prior to the sale at £580 million.
AustralianSuper is Australia’s biggest profit-to-member pension fund with more than £140bn in member assets under management and a growing presence in the UK property landscape.
This exciting new partnership combines funding from a leading, international investor with British Land’s best in class operational platform. It leverages British Land’s skills in mixed use, sustainable development to drive value for shareholders whilst bringing new homes, workspace, retail, leisure, employment opportunities and an enhanced public realm to the local community.
This transaction accelerates the delivery of British Land’s ambitions at Canada Water, increases returns and releases capital for further development. British Land will also earn fees from the JV as the development and asset manager for the Masterplan and will be entitled to an enhanced return if the JV meets certain returns targets.
The JV has already committed to developing Phase 1 of the Masterplan which is expected to complete in Q3 2024. British Land and AustralianSuper have committed to £201m of initial funding to the JV for the purposes of developing Phase 1 of the Masterplan and to progressing subsequent phases of the development. The funding shall be split equally between British Land and AustralianSuper.
It is anticipated that future development will be funded through a combination of shareholder equity and third party debt. The London Borough of Southwark (“LBS”) also has the right to participate in the Masterplan but has elected not to fully participate in Phase 1.
Simon Carter, CEO British Land said: “We are delighted to be working with AustralianSuper on this exciting development to deliver a new urban centre for London at Canada Water. The investment by AustralianSuper, who have extensive experience investing in major regeneration schemes, is testament to the strength of British Land’s reputation and best in class development and operational platform. This new partnership enables us to move faster, delivering new homes and workspace, creating new opportunities for local people and delivering value for our shareholders.
This transaction is a great example of our proactive approach to recycling our capital and leveraging our expertise by working with like-minded partners.”
Paul Clark, Senior Investment Director Property UK, AustralianSuper said: “Our investment in Canada Water will contribute to the retirement savings of our 2.6 million members, whilst also being part of a once-in-a-lifetime regeneration project that will provide benefits to residents, businesses and the community for generations to come.
The Canada Water Masterplan fits with our focus on investing at scale in large mixed-use projects in major urban centres and we believe this location will become a preferred destination for a range of end-users.
We are actively pursuing new large-scale investment opportunities in the UK and Europe, as well as building out our local team to support this objective. The opportunity to come together with a partner of the calibre of British Land is a critical step to our ongoing expansion in the region and closely aligns to our focus on high quality assets and responsible investment.
We are delighted to be working with British Land to accelerate the delivery of this critical regeneration project and look forward to seeing Phase 1 of the development come to life over the coming months.”