British Land to Sell 50% Stake in Meadowhall Shopping Centre to Norges for £725M

British Land in talks to sell Meadowhall shopping centre to Norway's sovereign wealth fund for £363M, reflecting a significant drop in valuation amid retail challenges.

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British Land to Sell 50% Stake in Meadowhall Shopping Centre to Norges for £725M

British Land to Sell 50% Stake in Meadowhall Shopping Centre to Norges for £725M

British Land, a major UK property company, is in advanced talks to take full ownership of the CA£725 million Meadowhall shopping centre in Sheffield, South Yorkshire, to Norges, Norway's sovereign wealth fund. The deal is expected to be worth around £363 million, including debt, valuing the entire shopping centre at approximately £725 million. This is a significant decrease from the £1.5 billion valuation of the property in 2012 when Norges first acquired a 50% stake.

The sale is part of British Land's ongoing efforts to divest from certain assets and focus on other areas of its business. Meadowhall is one of the top five shopping destinations in the UK, attracting around 24 million visitors annually. The potential sale to Norges would give the Norwegian fund full control of the 1.5 million sq ft shopping centre, which houses around 280 occupiers.

Why this matters: The proposed deal highlights the challenges facing the retail sector and the impact on property valuations. It also signals Norges' confidence in the future of prime UK retail locations, as the fund already has significant investments in other prominent UK properties.

British Land is also in discussions with other potential buyers as it looks to reduce its stake in the shopping center. The company plans to use the proceeds from the sale to invest in retail parks. Meadowhall was originally developed by Eddie Healey and Paul Sykes, who sold the complex to British Land in 1999 for a reported £700 million in profit.

Norges is a major property investor in London, with significant holdings in the West End and co-ownership of the West One shopping centre with British Land. The fund's potential acquisition of full ownership in Meadowhall suggests a belief that such prime retail locations can weather the storm and rebound, despite the rise of e-commerce and high business rates that have contributed to the decline in value over the past decade.

Key Takeaways

  • British Land in talks to sell full ownership of Meadowhall to Norway's Norges for £363M.
  • Meadowhall valued at £725M, down from £1.5B in 2012 when Norges acquired 50% stake.
  • Norges confident in UK prime retail despite e-commerce and high business rates challenges.
  • British Land to use sale proceeds to invest in retail parks, divesting from certain assets.
  • Meadowhall is one of UK's top 5 shopping destinations, attracting 24M visitors annually.