British Land picks up Woolwich Estate for £103m

British Land announced on Friday that it has acquired the Woolwich Estate, covering 4.9 acres in south east London, for a headline price £103m representing a net initial yield of 4.1%.

The FTSE 100 company said the acquisition was in line with its strategy of focussing on well-connected, mixed use assets which met the evolving needs of occupiers and their customers.

It added that it built on its portfolio of places benefitting from the new Elizabeth Line railway, including Broadgate, Paddington Central and Ealing Broadway, and provided “significant potential” to drive growth and returns through British Land’s placemaking, asset management and development expertise.

The board said it made an exciting addition to its existing portfolio of local retail centres, which provide convenience-led shopping for local communities.

British Land explained that the Woolwich estate covered 360,000 square feet of space in central Woolwich.

Predominantly retail, it also included more than 50,000 square feet of residential and 3,000 square feet of office space.

The area was said to be already benefiting from significant regeneration, led by the Elizabeth Line, which launches from Woolwich in December 2018 to reduce journey times to Canary Wharf and Bond Street to eight and 22 minutes respectively.

To coincide with that, 6,000 new homes had been built or were in the pipeline.

The estate was currently 95% occupied, with an average lease length of under four years, and average rent of £17 per square foot, providing British Land with an “attractive opportunity” to strengthen the offer and mix in line with the improving catchment.

“This acquisition provides a unique opportunity to create a thriving retail-anchored centre, benefitting from a mix of uses in an exciting, increasingly well connected and rapidly regenerating part of London,” said British Land head of retail, leisure and residential Charles Maudsley.

“We have a long term vision for the estate which will deliver space that works for retailers and their customers; which generates clear benefits for local communities and drives value for British Land.”

Maudsley said that, across its London campuses and its multi-let retail properties, it had developed a clear and distinct advantage in managing mixed use environments with development potential, and in “enhancing and enlivening” space through placemaking.

“This acquisition plays very well to those skills.”

British Land said the Woolwich Estate comprised 56 retail units and had footfall of six million.

It benefitted from an improving local demographic with more than 40% of residents falling within the top three most affluent groups, as per CACI consumer classification.

Coinciding with the arrival of the Elizabeth Line, Greenwich Council was investing £31m to deliver a new ‘creative district’, which the company said would transform five historic buildings into theatre and concert space, with offices and restaurants.