Landsec wraps up £490m Liverpool ONE acquisition

The investor has bought Abu Dhabi Investment Authority’s 69% stake in the 1.6m sq ft retail complex and the 23% controlled by Grosvenor, which developed the scheme originally.

The £490m transaction comes a few days after Place North West reported that a deal for a 92% stake in Liverpool ONE was close.

Landsec will pay £455m at a net initial yield of 7.5%. The remaining £35m payable to ADIA will be deferred for two years.

The transaction also includes “performance-related overage provisions with ADIA”.

Mark Allan, chief executive at Landsec, explained the thinking behind the acquisition.

“The top 1% of the UK’s shopping destinations provide brands with access to 30% of all in-store retail spend, which is why we continue to see brands focus on fewer, but bigger and better stores in the best locations.

“As such I am delighted that we have added another top-ten centre with a highly attractive return profile – meaning our unique portfolio now includes seven of the top 30 centres in the UK.”

He added: “Liverpool ONE already has a great line-up of brands in a thriving location and we look forward to building on this with our leading operating platform to further add to its exciting growth story.”

The acquisition is in line with Landsec’s objective to grow its investment in major retail destinations, recycling the proceeds from its £464m of non-core sales earlier in the year, the business said.

The deal means Landsec now owns some of the best performing retail centres in the country. Its shopping centre portfolio includes Bluewater in Kent, St David’s in Cardiff, and Trinity Leeds.

Landsec is eyeing rental growth at Liverpool ONE over the coming years. The company claims current income is around 4% below where it could be.

Since opening in 2008, the complex has attracted more than 400m visitors and generated more than £4bn for the local economy.

It has gone from strength to strength and become one of the best performing retail centres in the country.

Retail sales have grown 5% over the last year and overall occupancy is at 96% according to Landsec.

James Raynor, chief executive at Grosvenor Property UK, added: “Liverpool ONE is a phenomenal destination and we’re incredibly proud of what we’ve accomplished with and for the City over the last 25 years.

“It’s not only one of the most remarkable regeneration stories, re-defining what long-term investment and partnership can achieve, it continues to be one of the UK’s most successful retail and leisure destinations. And, under the unified ownership and management of Landsec, we know it will continue to thrive.”

Raynor provided some insight on how the business might spend the proceeds from the sale.

“Looking ahead, we have ambitious plans to grow and diversify the business and we will reinvest the proceeds from the sale in our core portfolio including our 10-year programme of investment in London and residential debt business, which has supported the delivery of 3,370 homes in just 2 years.”

At the time of writing Landsec’s share price was 571.50p, up 0.18% since the start of trading.