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Landsec Purchases 75% Stake in MediaCity

Landsec Purchases 75% Stake in MediaCity
05 November 2021
 

Landsec has acquired a majority stake in MediaCity, the 37-acre media, digital and tech hub in Salford, Greater Manchester, for £425.6 million.

Indicating optimism in the market, Landsec has planning consent for 1.6m sq ft of development, including office and residential, with an estimated Gross Development Value of £750 million. Phase one of the development was completed 10 years ago and comprises 1.48m sq ft across 11 buildings including work space, studios, incubator labs, residential as well as ancillary leisure and retail.

 

Optimism in Regional City Office Market

 

The purchase also underscores Landsec’s strategic approach to investing in regional cities where it believes it can acquire significant scale. Greater Manchester is well placed to support Landsec’s strategy – it is the UK’s largest regional economy, the largest regional office market, in terms of stock, take-up and transactional liquidity.

Previously owned jointly by Legal & General and Peel L&P, Landsec will partner with Peel L&P who will retain a 25 per cent stake and continue to serve as asset and development manager. 

The transaction includes £293.6 million of debt (£220.2 million on a proportionate basis), reducing Landsec’s equity investment to £207.6m which is satisfied in cash drawn from existing facilities. Landsec will also have an obligation to pay a further amount capped at £15 million linked to building remediation works which will be completed post-transaction.

The waterside destination, the world’s first BREEAM sustainable community, is home to some of the world’s most exciting creative, tech and media brands, from BBC North and ITV to Ericsson, The Hut Group, Kellogg’s and over 250 creative and tech businesses as well as schools and universities.

Mark Allan, Landsec CEO said: “Mixed-use developments with a clear sense of place are becoming an increasingly important ingredient in the fabric of cities. Opportunities to participate in large scale, established mixed-use developments are scarce and MediaCity is one such opportunity. 

“This acquisition presents us with the opportunity to deploy capital immediately into high-quality income-producing assets and also to invest further over time through the development of phase two. MediaCity is a compelling addition to our portfolio, providing the opportunity to invest and further develop the estate with the potential to be onsite from the first half of 2023. I’m particularly excited to be able to work alongside Peel, whose experience and expertise complements our own.”

Picture: a photograph of the exterior of MediaCity

Article written by Ella Tansley | Published 05 November 2021

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