Land Securities has acquired a 30% stake in Bluewater, one of the largest out-of-town shopping centres in the UK, for £656 mln (€818 mln).
Land Securities has acquired a 30% stake in Bluewater, one of the largest out-of-town shopping centres in the UK, for £656 mln (€818 mln).
The UK REIT purchased the stake from the UK division of Sydney-headquartered property group Land Lease at an overall net initial yield after expiry of rent-free periods of 4.1%.
In addition, Land Securities acquired the full asset management rights for the 167,000 m2 centre in Kent and 45.5-hectares of surrounding land for £40 mln.
Cushman & Wakefield advised Land Securities in the transaction, with Morgan Stanley advising the seller.
Following the transaction the Lend Lease Retail Partnership owns 25% of the asset, M&G Real Estate and Singapore sovereign wealth fund GIC own 35% and Hermes and Aberdeen Asset Management control 10%.
Bluewater is widely regarded as one the UK's prime shopping destinations outside central London. It attracts 27 million visitors a year and its catchment is one of the most affluent in the country. The centre is home to over 330 retailers, cafes, bars and restaurants, including Marks and Spencer, House of Fraser, John Lewis, American Eagle, Victoria's Secret, Tommy Hilfiger, Jack Wills, H&M and Zara. It also includes 13,000 parking spaces.
Scott Parsons, managing director of the retail portfolio at Land Securities, said: 'The acquisition of this interest in Bluewater is part of the continued strategic shift of our retail portfolio towards dominance, experience and convenience. 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.
'We see opportunity to improve returns at Bluewater by reducing the void rate of 5.3% in line with our retail portfolio average of 2.6%, combining units to provide fewer, bigger units which are more attractive to retailers, and improving the leisure and catering offer. We are confident that our fresh approach to asset management together with the South East's strong economy will deliver rental growth as market confidence returns.'
The transaction comes a day after Land Securities announced the sale of Bridges shopping centre in the northeastern UK city of Sunderland to clients of AEW Europe for €190 mln. The deal reflects a net initial yield of 6.9%.