British Land says it has exchanged contracts for the sale of its 50% stake in Meadowhall Shopping Centre, in Sheffield, to its partner Norges Bank Investment Management for £360m.
It says the deal is in line with its strategy to focus on retail parks and reduce its exposure to covered shopping centres.
This follows the sale of some ancillary land by the Joint Venture for £7m (British Land share) earlier this year.
Together these deals value the entirety of the Meadowhall Estate at £734m, 3% above September 2023 book value.
Proceeds after net debt of around £200m are expected to total about £156m.
As part of the transaction, British Land will remain as asset manager of Meadowhall shopping centre, for which it will continue to earn fees in line with current terms.
The deal is expected to complete in July 2024 and the proceeds will be used for general corporate purposes including reinvestment into retail parks.
Simon Carter, chief executive of British Land, said: “We have had a successful partnership with Norges over many years and are pleased to continue to work alongside them as asset managers of the centre.
“Following the sale of Meadowhall, 93% 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% occupancy we are delivering strong rental growth.”
A team from Addleshaw Goddard advised on the deal. The team, advising on all real estate aspects of the transaction, was led by head of Leeds office Lucy Sturrock, and included Jo Crouse, Sally Cowley, Megan Graveson and Lesley Reeves.