25th Jun 2014 07:04
LONDON (Alliance News) - Land Securities Group PLC Wednesday said it has acquired a 30% stake in the Bluewater shopping centre near London in Kent from Australian property business Lend Lease Group in a deal worth GBP656 million in cash.
FTSE 100-listed Land Securities also acquired the full asset-management rights for the centre and 110 acres of surrounding land for GBP40 million. The overall net initial yield after expiry of rent free periods is 4.1%.
The deal comes after UK press reports that rivals British Land PLC and Hammerson PLC also were looking to buy the stake in the shopping destination which attracts around 27 million visitors a year.
The centre totals 1.8 million square feet and is home to over 330 retailers, including House of Fraser and John Lewis. It also includes 13,000 parking spaces.
The deal will come as a blow to British Land which has stated its intention to increase its weighting to London and the South East above the current 61%, and Bluewater would have helped it realise its aims.
On the other hand, Hammerson, the retail specialist that owns Brent Cross shopping centre, already operates at a 38% loan-to-value, with an upper limit of 40%. A Bluewater acquisition would have increased its LTV to 44%, which was likely to be too high for a business with GBP1.2 billion development commitments over the next five years, meaning the company would need to carry out a share placing, analysts at Liberum Capital said.
"The acquisition of this interest in Bluewater is part of the continued strategic shift of our retail portfolio towards dominance, experience and convenience," Scott Parsons, managing director, retail portfolio, at Land Securities said in a statement.
"This acquisition, which increases our exposure to the South East, follows the recent disposals of Overgate, Dundee and The Bridges, Sunderland, and demonstrates the pace at which we are delivering on our strategy," Parsons added.
Lend Lease Retail Partnership continues to own 25% of Bluewater, M&G Real Estate and GIC Private Ltd own 35%, and Hermes and Aberdeen Asset Management control 10%.
At the open Wednesday, Land Securities shares are off 0.5% at 1,023.30 pence, while Hammerson shares are up 0.8% at 572.50p and British Land shares down 0.1% at 686.50p.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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