Norway’s sovereign wealth fund manager Norges Bank Investment Management (NBIM) is acquiring full ownership of Meadowhall Shopping Centre in the UK by buying the remaining half from British Land for £360m (€420m), and taking over the mall’s £426m debt in the process.
In 2009, British Land sold a 50% stake in Meadowhall to London & Stamford Property and its joint venture partner for £587.7m. Three years later, in October 2012, NBIM acquired its initial 50% stake from the joint venture between London & Stamford Properties and Greenpark Investments for around £348m, in a deal that valued the entire asset at the time at more than £1.5bn, including debt.
The manager of the NOK17trn (€1.45trn) Norwegian Government Pension Fund Global said it will now hold a 100% ownership interest in Meadowhall, adding that British Land will remain as asset manager on the centre which comprises 1.4m sqft of retail floor area.
Located in Sheffield in South Yorkshire, Meadowhall’s occupancy rate is listed as 99% on British Land’s website, with an average lease length of 3.4 years. The annual rent generated is £71m.
Mie Holstad, real assets CIO of NBIM, said: “We are very pleased to extend our ownership in Meadowhall, a dominant super regional shopping centre with strong occupier fundamentals.
Jayesh Patel, head of UK real estate at NBIM, said: “Despite being out of favour, we remain confident in the prime shopping centre sector, where rents and yields have rebased significantly. We are pleased to have the ability to acquire an additional stake in Meadowhall.
British Land said the sale is in line with its strategy to focus on retail parks and reduce exposure to covered shopping centres, adding that proceeds after net debt of £200m are expected to total £156m.
Simon Carter, CEO of British Land, said: “We have had a successful partnership with Norges over many years and are delighted to continue to work alongside them as asset managers of the centre.
“Following the sale of Meadowhall, 93% of our portfolio is now in our preferred segments of retail parks, campuses and London urban logistics. We will continue to grow our retail park portfolio; with low capex requirements parks offer attractive cash returns and at 99% occupancy we are delivering strong rental growth.”
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