British Land and Royal London Asset Management forge £385m joint venture for science hub

LONDON, UK: British Land and Royal London Asset Management Property have announced the creation of a 50:50 joint venture, set to transform 1 Triton Square into a premier science and innovation hub at Regent’s Place.

The partnership, valuing the property at £385 million, aims to expedite the development of this cutting-edge facility.

The joint venture will leverage the combined expertise of both entities in development and asset management to realize a state-of-the-art building designed for flexibility. It will feature a blend of fitted spaces and lab-enabled areas, with the option to include serviced offices for adaptable use on the lower floors, while maintaining top-tier office space above.

Strategically situated at the core of Regent’s Place campus in London’s Knowledge Quarter, 1 Triton Square is surrounded by prestigious research institutions like The Francis Crick Institute and University College London. This prime location within a thriving innovation ecosystem positions the venture to meet the increasing demands of these organizations.

This transaction aligns with British Land’s strategic goal of capital recycling, with the proceeds earmarked for reinvestment in future projects. The formation of this joint venture is expected to accelerate returns and enhance profitability.

For Royal London Asset Management, this move signifies a significant step in expanding its life sciences and innovation footprint across the Golden Triangle, encompassing London, Cambridge, and Oxford.

Committed to responsible property investment, Royal London Asset Management’s strategy to redevelop 1 Triton Square into a high-performance innovation center is in line with its core objectives of maximizing value and providing sustainable solutions for evolving market needs.

British Land is set to receive gross proceeds of £192.5 million from selling a 50% stake, in addition to a £149 million surrender premium previously obtained from Meta. The overall impact of these financial maneuvers, including the joint venture’s formation, fit-out, and leasing activities, is projected to yield an Internal Rate of Return (IRR) exceeding 30%. The disposal of the 50% share is anticipated to initially boost Net Tangible Assets (NTA) per share by approximately 2p and, following debt repayment and interest savings, increase FY25 Earnings Per Share (EPS) by roughly 1p. The deal also decreases the Loan-to-Value (LTV) ratio by 1.4%, offsetting the development expenditures incurred in the second half of FY24 on the company’s committed 1.9 million square feet development program.

Simon Carter, Chief Executive of British Land, said: “We are delighted to be working with Royal London Asset Management to deliver a world class science and innovation building at Regent’s Place.

We proactively took 1 Triton Square back from Meta to reposition it for science and innovation customers, with the expectation of unlocking significantly higher rents, whilst benefitting from a considerable surrender premium to further improve the economics.

This transaction is another example of how we drive value through establishing innovative JV partnerships, enabling us to flex our balance sheet, share the risk and crystallise the value created from Meta’s surrender premium.”

Mark Evans, Head of Property and Commercial Development at Royal London Asset Management Property, said: “We are thrilled to join forces with British Land to reposition 1 Triton Square for the science and innovation market. The partnership opportunity aligns with our wider strategy to leverage our platforms in new markets and continue to deliver on our commitment to purposeful investment.

We have long recognised the demand for best-in-class science and innovation space, particularly in the Golden Triangle, and the need for this space in supporting the UK’s economic growth. In testament to this strategic vision Royal London Asset Management has established 1.5m sq ft of holdings to meet these needs over the past 10 years. 1 Triton Square will increase our holdings to over 2.0m sq ft and will form a core part of our wider portfolio as we position life sciences and innovation as a core platform for further investment.”

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