Norges, Norway's £1.3 trillion sovereign wealth fund, is in talks to buy out British Land's 50% stake in Meadowhall, one of the UK's largest shopping centres, for around £363 million, including debt.
According to the Sunday Times, that deal values the Sheffield mall – which is owned 50:50 by British Land and Norges – at £725 million, or a sub 8% yield.
The Sunday Times, citing sources close to the deal, said that while a transaction between Norges and British Land was at an advanced stage and the likely outcome, talks were continuing with other prospective buyers. Mike Ashley's Frasers Group has previously been linked.
The Sunday Times adds that under the terms of the deal, British Land would continue to manage the shopping centre on behalf of Norges.
British Land began sounding out the market about a sale of the mall last year, seeking in excess of £750 million, or a circa 7% net initial yield for the whole complex, including the Norges stake.
The sale is a rare recent example of a stake in a super-regional mall becoming available, given the challenging nature of the investment market for large shopping centres.
CBRE has been advising on the sale of the 1.5-million-square-foot Meadowhall, which is 98% occupied, anchored by Marks & Spencer and Primark.
The asking price is half the value achieved when Norges bought its 50% share in 2012 from London & Stamford for £1.53 billion. The buyer would inherit £450 million of debt secured against the centre.
British Land first bought the mall from developers Eddie Healey and Paul Sykes in 1999 for £1.07 billion.
The mall is Yorkshire's premier shopping destination and one of only six out-of-town super-regional shopping centres in the UK. It houses around 280 occupiers, including Apple, Zara, Urban Outfitters, Hollister, Primark, Reiss, Hugo Boss, Whistles and Victoria's Secret.
Last year, CoStar News revealed that Landsec was in talks to buy a majority stake in Liverpool ONE, the shopping centre in Liverpool city centre, for around £350 million or a 7.5% yield. Those talks have now ceased.
CoStar News also revealed last year that IKEA was in talks to buy Brighton's Churchill Square shopping centre, which is a large mall but not a super-regional one. That deal completed at the end of last year.
Prior to that the largest stake sales have been in Bullring in Birmingham in July 2022 and Bluewater in Kent at the end of 2021.
Norges owns a significant real estate portfolio in London’s West End, including a 25% stake in The Crown Estate’s Regent Street portfolio and a 23.5% stake in Shaftesbury Capital, the owner of Covent Garden. It co-owns the West One shopping centre, next to Bond Street station, with British Land.
(This story has been updated to confirm when British Land first bought Meadowhall.)