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British Land sells Vodafone-leased data centres for £125m

Written by Wed 27 Sep 2023

British Land has sold its data centre portfolio for £125 million ($151 million). This comes two months after it was speculated that the Vodafone-leased data centres were valued at £100 million ($128.3 million).

In a business update, the CEO of British Land expressed his satisfaction with the continued momentum in the business.

“Operationally we are seeing strong leasing activity which reflects the exceptional quality of our portfolio and has resulted in our recent upgrade of the expected ERV growth in retail parks,” said Simon Carter, CEO of British Land.

The British real estate company said the portfolio’s net initial yield (NIY) was 4.6%, which delivered an internal rate of return (IRR) of 8.2% since acquisition in 2007.

Information regarding the portfolio’s specifics or the buyer was not disclosed.

The Lay of the British Land Sale

In August, reports suggested the potential buyer for the British Land office and data centre portfolio was Realty Income, a US real estate agency.

A month prior, Estate Gazette reported Savills was looking for potential buyers for the London-based sites.

The portfolio comprised sites currently under lease to Vodafone Enterprises, with these leases set to expire in April 2032.

Valued at an £100 million ($128.3 million), the portfolio spans 260,000 sqft. The rent generates £6.1 million ($7.8 million) per year.

The six data centres up for sale include a former glass factory at Smale and Solaglass House, a multi-story data centre at Mobility House on Croft Street previously run by Cable & Wireless, and a former telecoms facility at Dock Street previously owned by Mercury Communications in the 1980s.

Reports indicated marketing efforts envision medium to long-term redevelopment for the sites. This includes the potential for transforming them into student and residential accommodations, as well as expanding their use as data centres and offices.

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Written by Wed 27 Sep 2023

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