British Land (LON:BLND) has outlined the rationale and key terms of its recommended acquisition of Life Science REIT, describing the deal as “strategically and financially attractive,” immediately EPS accretive, and neutral to net tangible assets (NTA).
Speaking on a webcast, CEO Simon Carter said the transaction strengthens British Land’s science and technology platform at a time when the group is seeing “growing demand and real momentum” across the sector. Carter pointed to an accelerating U.K. science and technology backdrop, noting that venture capital funding is at its highest level since 2022 and that demand from AI and technology businesses is “particularly strong,” more than offsetting softer conditions in life sciences.
Portfolio focus and strategy
According to management, the portfolio includes:
- Two central London buildings in the Knowledge Quarter: Rolling Stock Yard and Herbrand Street
- A 24-acre modern technology park in Oxford with “very affordable rents”
- A 13-acre value-add campus in Cambridge and a smaller single Cambridge asset
The company said it anticipates a reduction in administrative expenses, including ending the existing management agreement, as well as finance cost savings. Carter emphasized that the assets are “immediately earnings accretive from synergies alone,” with additional accretion expected as vacancy is leased and reversion is captured.
Transaction terms, funding, and timeline
CFO David Walker said the offer comprises £0.141 in cash and 0.07 new British Land shares, equating to approximately £0.43 per Life Science REIT share. Walker said this represents a 21% premium to the prior day’s close and a 15% premium to the three-month volume-weighted average price.
The transaction implies an equity value of £150 million and is funded through a mix of cash and shares in a 33%/67% ratio, which Walker said results in “minimal impact” on loan-to-value (LTV). The deal is unanimously recommended by the Life Science REIT board, and British Land has already secured irrevocable commitments or letters of support from shareholders representing 31% of the share register. Subject to shareholder and court approval, Walker said completion is expected in the next three months.
Walker added that the acquired properties have a combined book value of £333 million, while the acquisition price implies a value of £276 million.
Occupancy, rents, and earnings outlook
Walker said Rolling Stock Yard, Herbrand Street, and the Merrifield Centre in Cambridge are fully let, with most vacancy at Oxford Technology Park. He described newly completed space at Oxford Technology Park as being marketed at “very affordable rents” in the low- to mid-£20s per square foot, adding that British Land is encouraged by demand it has been tracking.
He also highlighted that less than 6% of the portfolio is laboratory space, and that 80% of that lab space is currently let.
British Land’s “conservative underwrite” assumes £18 million of net rent in year one, based on the current rent roll and deals under offer. Walker said that with on-site developments at Oxford Technology Park, British Land anticipates a stabilized accounting net rent of £25 million, which he characterized as “significantly earnings accretive relative to the size of the deal.”
In response to a question on the December reported yield, management cited December contracted rent of £18.7 million and indicated that, using the £333 million portfolio value, the topped-up net initial yield based on contracted rent was approximately 5.25%, by their calculation.
Demand backdrop and tenant mix
Walker said British Land is seeing accelerating demand across “a broad range of innovation businesses,” with the Golden Triangle described as the center of U.K. venture capital funding. He cited $8 billion of investment in AI businesses in 2025, which he said more than offset declining life sciences investment since 2021, and stated that this growth positions the U.K. as the largest AI market in Europe and third largest globally.
He said the acquisition portfolio’s occupier base is spread across science and technology, and highlighted five major tenants—together representing almost half the rent roll—as:
- Thought Machine (fintech)
- Oxford Ionics (quantum computing)
- Fortescue Zero (advanced engineering)
- ZEISS (lens manufacturing)
- Wayve (autonomous driving)
Walker also pointed to leasing momentum at British Land’s innovation building One Triton Square at Regent’s Place, saying that since launch in October the company has completed 63,000 sq ft of deals and is under offer on a further 166,000 sq ft, taking the building to 72% let or under offer.
Q&A: Capex, lease-up timing, and management contract
In the Q&A, Carter said committed capex includes about £25 million tied to two buildings that have just started construction at Oxford Technology Park. Beyond that, he said only normal low levels of capex are expected, with the key value driver being raising occupancy from roughly 80% to full. Management said it has underwritten a 12–15 month lease-up period, varying by asset, to reach the targeted rent roll.
Asked about quantifying cost synergies, Walker said he could not provide precise annual savings under Takeover Code restrictions, but pointed to the elimination of costs such as the external manager fee and listed company costs, as well as financing benefits. Walker said British Land’s marginal cost of debt is around 4.5%, compared with about 6% for Life Science REIT’s debt.
Regarding the external management agreement, management said it has not agreed to buy the manager contract. Walker stated that notice to cancel the contract had been served and that British Land expects to cancel it. The notice period was described as two years, with notice served in November, and management said it expects to take on management of the portfolio straight away while providing for the cost of the contract. In response to a question on infrastructure, management said Oxford Technology Park has the power necessary for the completed scheme.
Closing the event, Carter said the key message is that the portfolio is “far broader than life sciences,” and that British Land’s platform can drive synergies and accelerate leasing to support EPS for shareholders.
About British Land (LON:BLND)
Our portfolio of high quality UK commercial property is focused on London Campuses and Retail & London Urban Logistics assets throughout the UK. We own or manage a portfolio valued at £13.0bn (British Land share: £8.9bn) as at 31 March 2023 making us one of Europe's largest listed real estate investment companies. We create Places People Prefer, delivering the best, most sustainable places for our customers and communities. Our strategy is to leverage our best in class platform and proven expertise in development, repositioning and active management, investing behind two key themes: Campuses and Retail & London Urban Logistics.
Featured Articles
- Five stocks we like better than British Land
- America’s Next Power Move Starts Underground
- Your Signature Is Missing – Act Before It’s Too Late
- NEW LAW: Congress Approves Setup For Digital Dollar?
- The biggest scam in the history of gold markets is unwinding
- URGENT: Trump Just Triggered AI’s Biggest Disruption Yet
