Mayfield aims to be an exemplar in office-led placemaking. Credit: via planning documents

Landsec to acquire U+I for £190m

LS Development, an indirect subsidiary of Land Securities Group, is to buy the developer behind the £1.4bn mixed-use Mayfield scheme in Manchester, in a bid to boost its pipeline of urban regeneration projects. 

The £190m offer from London-based developer and investor Landsec has been unanimously recommended by the U+I directors and will see shareholders make 149p per share, according to a stock exchange filing.  

The deal will “bring together two companies with strong and clear complementary value systems,” according to U+I chief executive Richard Upton. 

“U+I’s core portfolio of large, mixed-use regeneration schemes can now achieve its full potential with the capital experience and market positioning that Landsec can provide.” 

One of those mixed-use schemes is Mayfield, in which U+I has a 50% stake. The Manchester project could feature 2m sq ft of offices and 1,500 homes across a 24–acre site close to Piccadilly train station complete. Work to create a six-acre public park is already underway.

The scheme is being developed in joint venture with Manchester City Council, Transport for Greater Manchester and LCR. 

Landsec’s acquisition of U+I could see the Mayfield project kicked into gear following the latter’s difficulties in sourcing funding for the first phase of the project.

U+I Mayfield (2)

Studio Egret West drew up the masterplan for the 24-acre Mayfield development. Credit: via Ing

In addition, U+I is also delivering Morden Wharf at Greenwich Peninsula. This scheme proposes 1,500 new homes, 200,000 sq ft of warehouses and 50,000 sq ft of retail. 

Landsec aims to “accelerate the pace of development across these sites by combining Landsec’s own development capabilities and the strength of its balance sheet, with U+I’s placemaking skills”, according to the stock exchange filing. 

“Developing truly world-class mixed-use communities that inspire and create opportunity is more important than ever,” said Mark Allan, chief executive of Landsec. 

“The combination of Landsec and U+I is compelling and will help us accelerate our strategy, both by introducing exciting new urban development opportunities and by further strengthening Landsec’s front end development capabilities and placemaking skills.  

“Landsec has tremendous potential and this transaction is an example of our ability to capitalise on our strengths and create future value for all of our stakeholders.” 

The sale of U+I follows a difficult couple of years for the company. The firm reported a pre-tax loss of £86.7m in the year to April 2021, compared to a £58.6m loss the year before.

However, U+I said it was confident of a return to profit by 2023 as it embarked on a mission to “reset the business”.

For the 12 months ended 31 March 2021, U+I reported total assets of £427m.

Upton added: “U+I’s purpose to effect valuable social and economic changes through authentic, inclusive regeneration is an important proposition for Landsec and the wider industry.  

“This acquisition demonstrates confidence in our highly skilled and valuable team and for our many joint venture partners. Our strategy to refocus on what we do best has proved to be highly effective in capturing value for our existing shareholders and providing Landsec with an opportunity to unlock future value from our regeneration pipeline. We look forward to a hugely productive and exciting new future with Landsec.” 

Rothschild & Co represented U+I and UBS represented Landsec.

Your Comments

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Great news , hopefully the development of Mayfield will accelerate now.

By Anonymous

Much as I love the proposed architecture shown for Mayfield. I bet it doesn’t end up looking anything like this with all of those external frames. This isn’t a criticism, I just don’t think they’ll be able to afford it when it comes to it.

By Steve

I am looking forward to the park. Hyde Park doesn’t have offices in it. It is a park. Why can’t we just have a park? , A green space with trees and ducks?

By Elephant

Elephant, ever heard of Heaton Park?

By Dan

Yes Dan I have., I live overlooking it. Your point being?

By Elephant

Elephant, you mentioned Hyde Park, for no reason, I referred to Heaton Park, which you’d forgotten about despite apparently overlooking it

By Dan

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