May 10, 2010
Land Securities puts Stratford mall on market
May 10, 2010
LONDON, May 7 (Reuters) - Land Securities (LAND.L), Britain's biggest property company, is looking to sell its Stratford shopping mall, near the 2012 London Olympics hub, to boost its cash coffers ahead of a UK development push.
The 336,000-square-foot centre, including an attached plot of land suitable for development, is being offered for sale by advisor Jones Lang LaSalle (JLL.N) for about 90 million pounds, David Raven, a director in JLL's retail investment team, said.
A purchase at this level would reflect a net initial yield of about 7.5 percent, Raven said.
Land Securities, which reports its annual figures later this month, declined to comment on the reasons for the disposal.
However, a source close to the matter said a sale would chime well with a strategy of recycling capital before starting a number of construction projects in 2010.
The company has already committed to new office developments in London's West End business district and is broadly seen reviving plans to build a 155-metre tall skyscraper at Fenchurch Street in the capital's City financial district later this year.
News of Land Securities' decision to sell the Stratford centre comes less than a week after Westfield (WDC.AX), one of the world's largest shopping mall operators, reported continued progress on development of its neighbouring 1.45 billion pounds Stratford City project despite continued chills in the economy.
That centre, which is due to open in 18 months, is already 60 percent let and is set to be the largest urban shopping centre in Europe, Westfield said on its website.
Its anchor tenants include John Lewis, Waitrose and Marks & Spencer (MKS.L).
"The big difference between Stratford and the Westfield centre is that this is very much a convenience centre, whereas Westfield is very much fashion dominated. We don't expect Westfield scheme to have a negative effect on this very busy centre," Raven said.
Land Securities' Stratford mall attracts average footfall in excess of 400,000 a week and is anchored by Sainsbury's, Boots, New Look, Peacocks and WH Smith. (Reporting by Sinead Cruise; Editing by Andrew Macdonald) ($1=.6465 Pound) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)
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