REG - Land Sec. Group PLC - Purchase - 92% stake Liverpool ONE shopping centre

Land SecuritiesAnnouncement

17/12/2024 07:00

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RNS Number : 2569Q  Land Securities Group PLC  17 December 2024

LAND SECURITIES GROUP PLC ("Landsec")

 

Landsec acquires a 92% stake in Liverpool ONE shopping centre

Landsec announces that it has acquired a 92% stake in Liverpool ONE, one of
the premier shopping centres in the UK, from a wholly owned subsidiary of the
Abu Dhabi Investment Authority ("ADIA") (69%) and Grosvenor (23%) for an
overall consideration of £490m.

 

Of this total consideration, a payment of £35m to ADIA is deferred for two
years. The income return on Landsec's initial £455m outlay is expected to be
c. 7.5%. The centre's current rental income is 4% below ERV, so combined with
the benefits of Landsec's leading operating platform, strong brand
relationships and further ERV growth, rental income is expected to grow
meaningfully in the coming years.

 

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. Landsec will now own and manage seven of the top-30
shopping centres in the UK, providing brands and visitors with a unique
portfolio of regionally dominant, urban retail and leisure destinations.

 

Opened in 2008, Liverpool ONE is one of the most modern major retail
destinations in the UK, offering a strong mix of retail, food and beverage,
and leisure brands that attract footfall of 22 million people per year. Retail
sales have grown by 5% over the past twelve months, with new leases signed 10%
above ERV, relettings and renewals 5% above previous passing rent, and overall
occupancy of 96%. This highlights that Liverpool ONE is well-placed to benefit
from the continued focus on fewer, bigger and better stores from key brands,
further exemplified by recent upsizes and new lettings with e.g. M&S,
Sephora, Uniqlo and Zara.

 

The transaction includes certain performance-related overage provisions with
ADIA. Including this, Landsec expects its investment to deliver an unlevered
IRR in line with the guidance it provided at its recent half-year results. The
transaction initially adds c. 2.7ppt to the company's LTV and, upon
refinancing the existing secured debt on the asset, is expected to add c. 1.3p
to EPS on an annualised basis.

 

Mark Allan, Chief Executive Officer at Landsec said: "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. 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."

James Raynor, CEO, 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.

"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."

Ends

 

 

 

 

About Landsec

 

At Landsec, we build and invest in buildings, spaces and partnerships to
create sustainable places, connect communities and realise potential.  We are
one of the largest real estate companies in Europe, with a portfolio of
retail, leisure, workspace and residential hubs. Landsec is shaping a better
future by leading our industry on environmental and social sustainability
while delivering value for our shareholders, great experiences for our guests
and positive change for our communities.

 

 

 

Find out more at landsec.com

 

 Please contact:
 Press                        Investors
 Chris Hogwood                Ed Thacker
 +44 (0)7869 140 323          +44 (0)7887 825 869
 chris.hogwood@landsec.com    edward.thacker@landsec.com

 

 

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