Landsec buys Liverpool One, now owns seven of top UK malls

Landsec has made another major retail acquisition and this one is a biggie — it’s acquired a 92% stake in Liverpool One, which is among the top UK supermalls, buying 69% from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and 23% from Grosvenor for an overall consideration of £490 million.  

It will now own and manage seven of the top-30 shopping centres in the UK, including Bluewater, Westgate and St David’s. 

Of the purchase price, a payment of £35 million to ADIA is deferred for two years. The income return on Landsec’s initial £455 million outlay is expected to be around 7.5%. 

The centre’s current rental income is 4% below estimated rental value (ERV), “so combined with the benefits of Landsec’s operating platform, strong brand relationships and further ERV growth, rental income is expected to grow meaningfully in the coming years”. 

Landsec has been ramping up its mall investments (such as buying more of Bluewater) in recent years and said this latest move is in line with its objective “to grow its investment in major retail destinations, recycling the proceeds from its £464 million of non-core sales earlier in the year”. 

Opened in 2008, Liverpool One is among Britain’s best known malls and leisure destinations combined with a strong tenant line-up.

It attracts footfall of 22 million people a year and its retail sales have grown by 5% over the past 12 months, with new leases signed 10% above ERV, re-lettings and renewals 5% above previous passing rent, and overall occupancy of 96%. 

The company said this highlights that Liverpool One “is well-placed to benefit from the continued focus on fewer, bigger and better stores from key brands”.

Recent signings, openings and upsizings include Miniso, Bath & Body Works, Boux Avenue, Sephora, Hobbs, Whistles, Phase Eight, Monterey, Zara, White Stuff, M&S, TAG Heuer, Lounge, Swatch and Boss.

Landsec CEO Mark Allan 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-10 centre with a highly attractive return profile.”

And 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.”