Intu buys UK mall for €290m

Intu Properties, formerly Capital Shopping Centres Group, has agreed terms with Legal & General Property to acquire Midsummer Place Shopping Centre in Milton Keynes for £250.5 mln (€290 mln) before expenses.

The deal represents a net initial yield of 5.1%, based on current net rents of £13.4 mln, and a nominal equivalent yield of 5.5%.

Intu will fund the transaction by a share placing priced at 342.9 pence per share.

The asset addresses a gap in Intu's UK regional coverage, said Intu CEO David Fischel. 'As well as strong current operating metrics and good demographics, Midsummer Place offers considerable scope for rental growth. The acquisition fits well with our strategy of focusing on the best shopping centre destinations across the country.'

Midsummer Place, with annual footfall of over 17 million and current vacancy of 3%, was opened in 2000 and has more than 39,000 m2 of space, providing 50 retail units, on a single-level mall. The centre is anchored by Debenhams and H&M and has a weighted average unexpired lease term of six years.

Completion of the deal is expected to take place at end-March 2013.

'The acquisition is consistent with Intu’s strategy of owning and operating some of the very best shopping centres, in the strongest locations right across the country,' the company said in a statement. Intu owns 1.5 million m2 of retail space, valued at £7.1 bn.

Michael Barrie, director of Fund Management at LGP, added: 'Midsummer Place today represents one of the UK’s best performing regional malls. Our exit allows us to recycle capital into other market opportunities and to capitalise on LGP’s strong asset management and development capabilities.' The company bought the asset in 2003 for £216 mln.

Cushman & Wakefield acted for the vendor.