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British Land Buys Into Life Sciences After £800M London Sale

The life sciences real estate market, and Cambridge in particular, is red-hot right now.

British Land has moved into life sciences real estate with a pair of deals, diversifying as it sells a majority stake in one of its flagship London assets. 

The FTSE-100 REIT is buying life sciences real estate assets in Cambridge and Surrey, while GIC is in advanced talks to buy 75% of its Paddington Central office campus, React News reported.

The new acquisitions make BL the latest player to enter the sector that has become the darling of the industry, with Brookfield, Brockton, AXA and Clearbell all buying into life sciences real estate in the past 18 months. 

BL's offer to buy Peterhouse Technology Park in Cambridge from LaSalle Investment Management came in at £75M, React said, a 4.25% yield. The competition to buy the 139K SF, four-building scheme means that it is selling for 20% above the original asking price. 

The campus is leased to chip manufacturer Arm. One of the buildings becomes vacant in March next year and rents are below those at similar buildings. 

In the second deal, BL is buying a 91K SF building in Guilford called the Priestley Centre. The building sits on a 7.8-acre site that has the potential to be redeveloped into a life sciences campus. 

In London, GIC is in talks to buy from BL a 75% stake in Paddington Central, the 958K SF office campus that sits on an 11-acre site in west London. It will pay about £800M, a 4.3% yield, in a transaction that values the entire scheme at £1.1B. 

If the deal completes, it will be the largest London office transaction since before the coronavirus pandemic. It will also mean GIC co-owns or majority owns two of London’s largest office schemes, alongside Broadgate in the City.