Commercial Property News

Our magazines are published bi-monthly with in-depth features and news for the commercial property industry. On this page we have the latest news to keep you constantly updated on the market. On the left hand side of the page you can search our archived news which is stored monthly.



Wednesday, July 19, 2023

Kingfisher and British Land agree 198m stores deal

Kingfisher and The British Land Co have agreed a deal on seven B&Q; Warehouse large format stores. Kingfisher plc has sold a subsidiary company, which owns the seven stores, to The British Land Co for a total cash payment of 198m.

The stores, all freehold, are in prime edge of town locations in Ashford, Bury, Exeter, Glasgow, Grimsby, Lincoln and North Shields. The stores are approximately 100,000 sq ft each and, in total, extend to nearly 700,000 sq ft. The portfolio represents approximately 7 per cent of Kingfisher's total freehold and long leasehold assets.

The stores are let at current market rental levels to B&Q; (Kingfisher's main UK subsidiary) on 20-year leases with the tenant having an option to break after 15 years.

The leases have been structured to provide significant operational flexibility through assignment, under-letting and alterations. The rent is payable monthly in advance and will be uplifted annually in line with the change in the Retail Prices Index, subject to a cap. This reflects B&Q;'s desire to align property occupation costs more closely with the operating business environment. It will limit B&Q;'s rental increases for the stores and protects the business from any increases above the current rate of inflation. It also provides stability and certainty of cashflow for B&Q.;

Terry Hartwell, Group Property Director of Kingfisher, said: "Through this transaction, Kingfisher is taking advantage of the current buoyancy in the direct property investment market in the UK to finance its operational business at attractive rates going forward. The proceeds of the transaction will be used to repay existing debt and to invest in Kingfisher's worldwide store opening programme, including further freehold acquisitions."

Bob Bowden, Property Investment Director, British Land, said: "This purchase lies within our core out of town retail expertise and adds to our portfolio of index linked leases in which we see value."