British Land, AustralianSuper form JV for Canada Water development

British Land, AustralianSuper form JV for Canada Water development
Image: Courtesy of British Land

British Land has sold 50% of its share in the Canada Water masterplan to Australia’s pension fund AustralianSuper for £290 million. 

Following completion of the sale, British Land and AustralianSuper formed a 50:50 joint venture to accelerate the delivery of this 53 acre development, according to the joint statement.

This transaction values British Land’s interest prior to the sale at £580m.

British Land will also earn fees from the JV as the development and asset manager for the masterplan and will be entitled to an enhanced return if the JV meets certain returns targets.

The JV has already committed to developing Phase 1 of the masterplan which is expected to complete in Q3 2024.  

British Land and AustralianSuper have committed to £201m of initial funding to the JV for the purposes of developing Phase 1 of the Masterplan and to progressing subsequent phases of the development. 

”The funding shall be split equally between British Land and AustralianSuper.  It is anticipated that future development will be funded through a combination of shareholder equity and third party debt. The London Borough of Southwark (“LBS”) also has the right to participate in the Masterplan but has elected not to fully participate in Phase 1,” the companies said.

Simon Carter, CEO British Land said: “We are delighted to be working with AustralianSuper on this exciting development to deliver a new urban centre for London at Canada Water.  The investment by AustralianSuper, who have extensive experience investing in major regeneration schemes, is testament to the strength of British Land’s reputation and best in class development and operational platform. This new partnership enables us to move faster, delivering new homes and workspace, creating new opportunities for local people and delivering value for our shareholders.

This transaction is a great example of our proactive approach to recycling our capital and leveraging our expertise by working with like-minded partners.” 

Paul Clark, Senior Investment Director Property UK, AustralianSuper said: “Our investment in Canada Water will contribute to the retirement savings of our 2.6 million members, whilst also being part of a once-in-a-lifetime regeneration project that will provide benefits to residents, businesses and the community for generations to come.

The Canada Water Masterplan fits with our focus on investing at scale in large mixed-use projects in major urban centres and we believe this location will become a preferred destination for a range of end-users.

We are actively pursuing new large-scale investment opportunities in the UK and Europe, as well as building out our local team to support this objective. The opportunity to come together with a partner of the calibre of British Land is a critical step to our ongoing expansion in the region and closely aligns to our focus on high quality assets and responsible investment.  

We are delighted to be working with British Land to accelerate the delivery of this critical regeneration project and look forward to seeing Phase 1 of the development come to life over the coming months.”

Covering 53 acres, the Masterplan is centrally located in Zone 2 on the Jubilee Line and London Overground, making it easily accessible from London Bridge, the West End, Canary Wharf and Shoreditch. 

British Land received full planning permission for the 5m sq ft scheme in 2020. 

”This consent is highly flexible, enabling us to deliver between 2,000 and 4,000 new homes alongside a mix of commercial, retail and community space.  We are on site with the first three buildings covering 582,000 sq ft including 265 new homes.  Sustainability is central to the Masterplan.  Over 35% of the Masterplan will be public realm and we are delivering 12 acres of new open space including a 3.5 acre park.  Our developments will target the highest environmental standards including BREEAM Outstanding on the Commercial space, BREEAM Excellent on the retail and Home Quality Mark Beta 3 for residential,” said in the statement.