British Land & Royal London JV to create London science hub

Six months after Meta, owner of Facebook, decided to leave its offices at 1 Triton Square in London, landlord British Land has joined forces with Royal London Asset Management to create a £385 million science hub in the building.

British Land has sold half of its stake in 1 Triton Square to Royal London for £192.5 million and has entered into a 50:50 joint venture with the asset manager to deliver what they describe as a “flexible world class science and innovation building” in Euston with different types of labs as well as serviced office space.

Last September Meta had to pay British Land a £149 million break fee after exiting its lease contract early, as the US tech company decided it needed less office space.

1 Triton Square, a 36,000 sq m asset, is located at the centre of the Regent’s Place campus within London’s Knowledge Quarter, which is home to leading research institutions including The Francis Crick Institute, The Wellcome Trust, The Alan Turing Institute and University College London, which are all expected to need more space in future as they expand.

“We are delighted to be working with Royal London Asset Management to deliver a world class science and innovation building at Regent’s Place,” said Simon Carter, chief executive officer, British Land. “We proactively took 1 Triton Square back from Meta to reposition it for science and innovation customers, with the expectation of unlocking significantly higher rents, whilst benefitting from a considerable surrender premium to further improve the economics.

The transaction is “another example of how we drive value through establishing innovative JV partnerships, enabling us to flex our balance sheet, share the risk and crystallise the value created from Meta’s surrender premium,” Carter added.

The deal also delivers against one of British Land’s key strategic priorities, to actively recycle capital with the proceeds being reinvested into future developments. The combined impact of the surrender premium, JV formation and subsequent fit-out and leasing is expected to deliver an IRR of over 30%, the group said.

The JV is also a milestone for Royal London AM’s property team as it builds on its existing life sciences and innovation platform across the Golden Triangle of London, Cambridge and Oxford.

“The partnership opportunity with British Land aligns with our wider strategy to leverage our platforms in new markets and continue to deliver on our commitment to purposeful investment,” said Mark Evans, head of property and commercial development, Royal London AM Property. “We have long recognised the demand for best-in-class science and innovation space and have established 1.5 million sq ft of holdings to meet these needs over the past 10 years.”

1 Triton Square will increase Royal London’s holdings to over 2 million sq ft and will form “a core part of our wider portfolio as we position life sciences and innovation as a core platform for further investment”, Evans said.