Landsec eyes outlets and mall in deal spree
Landsec is circling Nuveen’s £600m designer outlet portfolio while embarking on talks to buy the Lendlease Retail Partnership’s stake in Kent’s Bluewater Shopping Centre, as it seeks to continue a run of eye-catching acquisitions.
The deals, if successful, would follow notable purchases made by the REIT in recent weeks – principally its £190m proposed takeover of U+I and 75% stake purchase in MediaCityUK. The company has shifted its priorities from selling and shoring up to spending on acquisitions, having swung back into the black earlier this month.
Nuveen appointed Morgan Williams to sell its Cheshire Oaks and Swindon McArthurGlen outlets last month. Other parties interested in the outlets, which have already been through two bidding rounds, are thought to comprise a mix of investment giants and European investors.
Landsec is circling Nuveen’s £600m designer outlet portfolio while embarking on talks to buy the Lendlease Retail Partnership’s stake in Kent’s Bluewater Shopping Centre, as it seeks to continue a run of eye-catching acquisitions.
The deals, if successful, would follow notable purchases made by the REIT in recent weeks – principally its £190m proposed takeover of U+I and 75% stake purchase in MediaCityUK. The company has shifted its priorities from selling and shoring up to spending on acquisitions, having swung back into the black earlier this month.
Nuveen appointed Morgan Williams to sell its Cheshire Oaks and Swindon McArthurGlen outlets last month. Other parties interested in the outlets, which have already been through two bidding rounds, are thought to comprise a mix of investment giants and European investors.
Nuveen paid £365m for the properties, as well as a shopping centre in Bridgend, Wales, on behalf of its UK Outlet Mall Fund in 2008.
The 349,000 sq ft Cheshire Oaks outlet centre, at Ellesmere Port, has 126 stores. Its tenants include Lululemon, Calvin Klein, Tommy Hilfiger and Boss. The Swindon location, which measures some 250,000 sq ft, has around 124 stores.
The properties would be added to Landsec’s existing £737m factory outlets business, which include Gunwharf Quays in Portsmouth, Braintree Village in Essex, Clarks Village in Somerset and West Yorkshire’s Junction 32.
Sales among Landsec’s outlet portfolio rose by 7.9% in the six months ending September compared with pre-pandemic performance. Values inched up by 1% over the six-month period.
Separately, Landsec is in discussions to buy a 25% stake in Bluewater from a fund managed by Lendlease, which would give it a 55% holding.
The stake is understood to be worth some £215m based on recent book values, with market sources estimating a yield of about 7.5%, and that the landlord is also considering scope to buy out the remaining shareholders in the 1.8m sq ft centre, which it also manages.
Landsec bought a 30% stake in Bluewater in 2014 for £656m, with the remainder today divided between Lendlease Retail LP, M&G Real Estate and GIC, Royal London Asset Management and Aberdeen Standard Investments.
Earlier this year, Landsec highlighted its intentions to buy cut-price shopping centres, with chief executive Mark Allan underlining their growing upside potential. At the time he said the sector was “on the agenda in a way that it won’t have been in the previous few years”.
CBRE is selling the stake in Bluewater on behalf of the vendor.
A spokesman for Landsec said the company was unable to comment on individual opportunities or market speculation, but added: “We have said consistently since the launch of our new strategy in October 2020 that we are considering various acquisition and disposal opportunities that make financial and strategic sense to the business.”
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