British Land announces sale of 50 per cent stake in Meadowhall to Norges Bank Investment Management for £360m

The transaction is expected to complete in July 2024 and British Land said the proceeds will be used for “general corporate purposes” including reinvestment into retail parks.

In a statement, British Land said: “In line with its strategy to focus on retail parks and reduce exposure to covered shopping centres, British Land announces that it has exchanged contracts for the sale of its 50 per cent stake in Meadowhall Shopping Centre to its partner Norges Bank Investment Management for £360m.

"This follows the sale of some ancillary land by the Joint Venture for £7m (British Land share) earlier this year.

The statement added: “Together these deals value the entirety of the Meadowhall Estate at £734m, 3 per cent above September 2023 book value. Proceeds after net debt of c.£200m are expected to total c.£156m.”

Simon Carter, Chief Executive of British Land, said: "We have had a successful partnership with Norges over many years and are delighted to continue to work alongside them as asset managers of the centre.

“Following the sale of Meadowhall, 93 per cent of our portfolio is now in our preferred segments of retail parks, campuses and London urban logistics.

“We will continue to grow our retail park portfolio; with low capex requirements parks offer attractive cash returns and at 99 per cent occupancy we are delivering strong rental growth."

Meadowhall Shopping centre opened in September 1990 on the site of the demolished East Hecla Works of Hadfields Ltd.

At the time it was the second largest shopping centre in the UK. The site, in the Lower Don Valley, was chosen to help regenerate Sheffield’s industrial east end which had been hit hard by the recession of the 1980s, which led to the closure of many steel and manufacturing businesses.

Meadowhall is a 200 acre estate, which includes a 1.5m sq ft shopping centre with around 280 occupiers and a 103 bed hotel let to Premier Inn and two plots of development land totalling 50 acres. For the year ended March 31 2023, the joint venture generated net rental income of £59m.

Last year, Meadowhall announced that the fashion brand Zara would be moving from its current position at Meadowhall to take a 35,000 square foot store previously occupied by House of Fraser.

British Land owned or managed a portfolio valued at £12.7bn in September 2023, making it one of Europe's largest listed real estate investment companies. Norges Bank Investment Management was set up to manage revenue from Norway’s oil and gas resources. According to its website, the fund serves as a financial reserve and as a long-term savings plan so that both current and future generations of Norwegians benefit from the country’s oil wealth.