Real estate giant Land Securities (Landsec) has agreed a deal to buy the Metrocentre shopping centre complex in Gateshead, Tyne and Wear, for £516 million.
On Thursday, the London-listed firm said it would launch a £500 million equity fundraiser to help fund the deal.
Landsec, which is the majority owner of Bluewater in Kent and Liverpool One, told shareholders it had exchanged contracts to buy 100% of the Metrocentre from Tynehawk Holdings.
Tynehawk is the holding firm for a group of investors who took control of the shopping entre business after the collapse of previous owner Intu in 2020.
The investors launched a process to sell the business earlier this year, with reports it had drawn interest from suitors including Mike Ashley’s Frasers Group as well as Landsec.
Completion of the deal is conditional on a legacy legal entity from Intu being dissolved, which is expected to take place next month, and consent from bondholders.
Metrocentre attracts more than 16 million visitors each year and generates retail sales of about £650 million a year across its 282 stores.
The acquisition deal also includes an adjacent retail park with 15 units.
The deal is part of a shift by Landsec further towards retail destinations and away from office developments.
It previously said it planned to invest a further £1 billion in major retail assets as part of its strategy.
Landsec said it expects to fund the deal through the £500 million equity raise and existing debt facilities.
Mark Allan, chief executive of the firm, said: “Growing our investment in major retail destinations remains our highest conviction call, given the high income yields and attractive income growth on offer for the right assets.
“Our acquisition of Metrocentre represents a rare opportunity to obtain 100% control of a top-10 UK shopping centre.
“Metrocentre offers the scale, relevance and quality of catchment where demand from brands is highest, as they focus on fewer, bigger, better stores in the strongest locations.”
Landsec said it has seen “strong customer demand” continue so far this financial year, with lettings growth over the five months to August 31.
It said it expects to deliver net rental income growth of between 3% and 5% for the year to March 2027.
