London & Stamford sells Meadowhall stake to NBIM
British Land and Norges Bank Investment Management (NBIM) have signed a new joint venture agreement for the Meadowhall shopping centre, after London & Stamford sold its 50% stake in the Sheffield retail property to the Norwegian investment manager.
The purchase price for London & Stamford’s stake values the Sheffield shopping mall at £1.525bn, reflecting a net initial yield of 5.09%. London & Stamford said the proceeds to the joint venture holding the stake (with Green Park Investments) were £307.9m, generating a profit of £155.9m over its initial investment in 2009.
London & Stamford’s chairman Raymond Mould said Meadowhall’s performance had been outstanding since then, with tenant performance at the retail centre “generally good and in some cases exceptional” despite difficult trading conditions.
British Land said it would continue to manage the shopping centre under the new deal with NBIM, the investment manager for Norway’s government pension fund. The agreement also covers 74 acres of adjoining development land.
British Land CEO Chris Grigg said: “ As one of our largest shareholders and a leading international investor, Norges is an ideal strategic partner for British Land”.
Meadowhall provides 1.5m sq ft of retail and leisure space on the edge of Sheffield. It attracts more than 24m shoppers a year. British Land said the centre had consistently high occupancy levels (97%) and a long weighted average lease length, at 9.3 years to first break. The group added that the mall’s performance had benefited significantly over the past two years from a targeted programme to broaden its appeal by widening its catchment area – attracting more well-off shoppers and boosting the amount of time that people spend at the centre. This included a £7m redevelopment of the food court.
