Weekly data sheet: Mega malls coming to market suggests prime shopping centre values have bottomed out

British Land, Norges and CPPIB are joining ADIA and Goldman Sachs in attempting trophy shopping centre sales.

UK Reit British Land and its Norwegian sovereign wealth partner, the 50-50 joint owners of Meadowhall, have appointed CBRE to launch a sale in the coming weeks.

The guide price, disclosed by The Times this week, is likely to be £750 mln, equating to an initial yield between 7% and 8%.

The 1.5 million ft2 shopping centre on the M1 near Sheffield is one of the top 5 in the UK and appetite from potential buyers will put a floor under prime shopping centre values if the sale goes through.

British Land paid £1.17 bn for the asset in 1999, selling 50% to London & Stamford in 2009 for £588 mln. British Land put a 25% stake up for sale three years later, but shelved its plan. At the same time, Norges bought out London & Stamford, for £348 mln for the latter’s 50% stake.

In a second significant potential disposal involving a trophy regional shopping centre, Canadian pension fund manager CPPIB was reported this week to be exploring the sale of its 50% share in CentreO Oberhausen, Germany’s largest regional mall. If this goes ahead, one potential buyer could be the 150,000 m2 centre's joint owner, Unibail-Rodamco.

These for sale signs are being hoisted three months after Goldman Sachs moved first in this market, mandating CBRE and Eastdil to explore a sale of Ireland’s top mall, 112,000 m2 Blanchardstown in Dublin.

Meanwhile, sovereign wealth fund ADIA is in talks to sell its stake in Liverpool One, the 1.65 million sq ft shopping centre co-owned with Grosvenor. UK Reit Landsec has been tipped as the frontrunner to buy ADIA out.

The timing of these potential sales by experienced real estate investors suggest they believe values for big shopping centres have finally bottomed out.

The drought of big deals completing this year continues with just one this week: Cain International’s forward sale for £500 mln of five student housing developments in strong UK university cities. The portfolio includes 45-storey Cirrus Point in Leeds, which Cain says will be the tallest student housing accommodation in the world. Menora Mivtachim Group of Israel is the buyer.

Banks and alternative lenders continue to be very busy with refinancings and there are 10 more recently completed loans logged this week. Notable are two involving the European Bank for Reconstruction and Development and the European Investment Bank. The banks are supporting Heimstaden and CTP in further drives to upgrade the green operation of their assets.

We also track two funds raising capital. Click here to access all the data.


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