British Land Company PLC (LSE:BLND) has agreed to sell a stake in Sheffield’s Meadowhall Shopping Centre as part of a strategic refocus on retail parks.
Some 50% of the covered shopping centre is to be sold to Norges Bank Investment Management for £360 million, British Land announced on Monday.
“We have had a successful partnership with Norges over many years and are delighted to continue to work alongside them,” chief executive Simon Carter commented.
This leaves 93% of British Land’s portfolio in the “preferred” retail park, campus and London urban logistics segments.
Proceeds are set to total £156 million after net debt of around £200 million is taken into account, valuing the shopping centre, alongside its distribution centre and hotel, at £734 million.
British Land will remain the shopping centre’s asset manager and continue to earn fees after Meadowhall generated £59 million in income last year.
“We will continue to grow our retail park portfolio,” Carter added, with the sale set to knock 0.6p off full-year per share earnings after being completed in July.
This includes “with low capex requirement parks [that] offer attractive cash returns,” he said, “at 99% occupancy we are delivering strong rental growth”.