British Land sells its half of Meadowhall for £360m

Norges Bank Investment Management is now the sole owner of the Sheffield shopping centre following the completion of a deal valuing the estate at £743m.

BL said that the disposal of its 50% stake to its former partner is in line with its strategy to focus on retail parks and reduce exposure to covered shopping centres.

The transaction follows the sale of some ancillary land by the joint venture for £7m 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 £156m for British Land, which will remain as asset manager of the shopping centre, earning fees in line with current terms.

The transaction was first floated as a full disposal by both parties last September, before a Norges takeover emerged in recent weeks as the more likely outcome. The deal is expected to formally complete in July.

Norges Bank IM is a government fund that aims to provide long-term revenues, putting the proceeds of Norway’s oil and gas resources to use. Its formal trading name is the Government Pension Fund Global.

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% 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.”