Land Secs acquires O2 Centre in London at 6% yield

UK REIT Land Securities announced on Monday it has completed the off-market purchase of the O2 Centre in London for £126 mln (EUR 143 mln), reflecting a yield of 6%. The investment volume was 27% higher than the vendor, Matterhorn Palos Partnership, paid when it purchased the retail and leisure asset in March last year from the X-Leisure Fund. That deal represented a net initial yield of 7.83%.

Matterhorn Palos Partnership is a joint venture between Matterhorn Capital and Palos Investments.

The 28,000-m² centre at Finchley Road in the UK capital is anchored by a Sainsbury's food store. The leisure component includes an eight-screen Vue cinema and restaurant facilities. The scheme also includes a stand alone Homebase unit (4,000 m2) with open A1, non-food planning consent set at the far end of a 518-space car park.

Commenting on the acquisition, Richard Akers, managing director Retail Portfolio for Land Securities said: 'This is an excellent opportunity for Land Securities to expand its retail portfolio. We have been clear that we would look for assets which offered a strong catchment and the opportunity for us to apply our expertise to drive growth.

'London has proved a resilient retail market and the excellent location and opportunities offered by the centre, including its potential for immediate asset management activity and longer term development plans, make it an attractive significant opportunity for the Group.'