X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

For more retail coverage, click GlobeSt.com/RETAIL.

LONDON-British Land is splashing out euro 1.2 billion ($1.5 billion) to buy Pillar Property, the UK’s largest owner and manager of retail parks. The purchase price reflects a 7.5% premium on Pillar’s share price.

The deal is British Land’s first significant corporate acquisition under its new chief executive, Stephen Hester, who took over from founder John Ritblat in November. The buy also boosts its retail holdings to about euro 14.6 billion ($18.3 billion), from its current euro 3.9-billion ($4.9-billion) portfolio. In addition, it strengthens the company’s position in the strongly performing out-of-town–suburban–retail property sector.

But some analysts expressed concern that the deal comes just as the retail sector starts to slow. Hester dismissed these concerns saying that out-of-town retailing has been the fastest-growing sector of the property market in the past five years and was likely to remain so in the next five. “Virtually all of the retailers, including those whose sales are going down, have plans to expand their out-of-town presence,” Hester says. “We remain confident that, even if the retail market slows from where it was in the past five years, there will be positive growth and that the place to be will be out-of-town retail warehouses.”

Demand for out-of-town shopping space has remained strong, partly as retailers look for lower rents and because of planning restrictions on building new retail parks.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.