British Land and Royal London Asset Management Property have confirmed they are forming a 50:50 joint venture to reposition 1 Triton Square, NW1, as a life sciences hub.
The deal, previously revealed by EG, values 1 Triton Square at £385m. BL will receive gross proceeds of £192.5m from the sale of a 50% share.
Plans for the redevelopment come after Facebook owner Meta shelled out £149m to surrender its lease at the premises last year. BL said the combined impact of the surrender premium, jv formation and subsequent fit-out and leasing is expected to deliver a 30%-plus IRR.
The 50% disposal will result initially in a circa 2p increase in NTA per share, while the pay-down of debt and the related interest saving will increase FY25 earnings per share by around 1p. The transaction will reduce LTV by 1.4%.
When complete, the building will offer a mix of fitted and lab-enabled space as well as the potential to incorporate serviced offices to accommodate flexible requirements at the lower levels, while retaining “best-in-class” office space on upper floors.
1 Triton Square is located in the heart of the Regent’s Place campus in London’s Knowledge Quarter, which is home to research institutions including the Francis Crick Institute, Wellcome Trust, Alan Turing Institute and University College London.
BL said the campus’s location meant it was well positioned to capture the growing space requirements from those businesses.
The listed owner said the proceeds would be reinvested into future developments, and that the new partnership would speed up and enhance returns.
Simon Carter, chief executive at British Land, said: “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 the deal had increased the life sciences space in its portfolio to just over 2m sq ft.
Evans said: “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 2m 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.”
Photo from British Land
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