Meadowhall could change hands in mall giants' asset swap deal

By

Nigel TAYLOR

Published
Mar 21, 2022

Commercial property rivals British Land and Landsec are understood have held talks over a major asset swap. Negotiations would involve Sheffield’s Meadowhall shopping centre changing ownership with a number of retail parks heading in the other direction.

Under a potential £800 million assets deal, Landsec would acquire British Land’s 50% share of Meadowhall. In return, British Land would take Landsec’s 10 retail parks, The Times reported. 

Although talks between the two companies are said to have stalled for now, a deal remains a possibility, the newspaper said. Both property giants have yet to comment.

However, the possible asset swap would make sense, given the paths both companies have decided on. 

While both returned to profit last year after a gruelling 18 months had seen the pandemic hit the commercial property sector hard, British Land noted that its retail parks had performed “particularly strongly”. 

That supported its earlier decision to shift focus to the sector "having seen the benefits on [their] value play [and] we expect the value opportunity in retail parks to continue with rents stabilising”.

Meanwhile, Landsec also admitted early last year its ongoing recovery wouldn’t include its retail park portfolio, which it wanted to sell.

At the time, Landsec had earmarked around £4 billion of assets for disposal over the next few years, including “assets in sub-scale sectors where we have little or no competitive advantage… including retail parks”.

Its shift in focus has meant concentrating attention on prime, high profile locations, hence its potential interest in buying into Sheffield’s Meadowhall shopping centre. In December, Landsec also paid £172 million to buy an additional 25% share in Bluewater, buying out Lendlease Retail Partnership.

Meadowhall, which is jointly owned by British Land and Norwegian bank Norges, was valued at £778.7 million in March last year. British Land has secured outline planning permission to develop 571,000 sq ft of land adjacent to the centre into logistics centres and accompanying warehousing. 

Landsec’s 10 retail parks were valued at £405 million in September.