Landsec ups Bluewater stake in £95m deal
Landsec has expanded its ownership of Bluewater shopping centre to 74 per cent following the completion of a £95 million transaction for an additional 10 per cent stake in the Kent retail destination.
The property company stated that the acquisition would provide enhanced flexibility for managing its investment while delivering operational efficiency savings. The purchase price reflects a 7.4 per cent yield based on net rental income from its existing holding.
Performance at Bluewater continues to exceed broader market trends. Retail sales at the centre climbed 7.4 per cent during the five months ending August 31, whilst visitor numbers increased three per cent. These figures contrast sharply with a 1.7 per cent decline in sales nationally and stagnant footfall across the retail sector.
According to Landsec, Bluewater is capitalising on a strategic shift amongst retailers who are focusing investment on fewer, larger-format stores in prime shopping locations.
Major store expansion
Next inaugurated a 132,000 square foot store at Bluewater in July, occupying the former House of Fraser space and tripling its footprint at the centre. The retailer characterised the branch as its largest store in the United Kingdom.
The expanded Next location features extended clothing collections, an enlarged homeware section and a Costa café. It supersedes the retailer's previous 44,600 square foot unit and represents Bluewater's first new anchor tenant since the centre launched in 1999.
The shopping destination's tenant roster also encompasses Aesop, Footasylum and Garage, whilst Hush recently established its inaugural Kent and South East England store at the venue.
Broader investment strategy
This transaction follows Landsec's announcement earlier in October regarding its agreement to purchase Gateshead's Metrocentre for £516 million, forming part of the company's strategy to deploy a further £1 billion into major retail properties.
Mark Allan, chief executive of Landsec, stated:
Growing our investment in major retail destinations remains our highest conviction call.
Allan highlighted retailers' appetite for larger stores in established locations as a catalyst for rental growth. Landsec indicated that upon completion of the Metrocentre acquisition, its portfolio would include three of the UK's top 10 shopping centres and eight of the top 30.
