Land Securities has bought a 10% slice of the £573m X-Leisure fund.
The UK’s largest REIT has spent around £30m buying small holdings in the fund from several of the circa 20 stakeholders, which include Coal Pension Properties and Aviva Investors.
It had been in talks to acquire a controlling stake in the business from main shareholders Capital & Regional and Area Property Partners last summer. However, the deal collapsed after the parties were unable to agree on pricing.
At that time, C&R’s holdings were valued at around £65m and Area’s 30% stake at close to £165m.
Fund manager Threadneedle and Legal & General Property are also both understood to have considered buying a controlling ownership in X-Leisure.
A source close to the deal said: “The talks between the parties were always about price. Land Securities has a positive view of retail and leisure as a mix. Leisure activities, such as eating out, are things that cannot be replicated on the internet. Land Securities’ new shareholding shows that it is interested in the assets and gives it a seat at the table.”
LandSec said it sees the leisure sector becoming a more prevalent part of the tenant mix in large retail schemes.
In 2010, the REIT bought the 02 Centre in Finchley, NW6, for around £120m from the Matterhorn Palos Partnership, and last August it acquired a leisure and restaurant complex in Bath from Aprirose for £20m. Most recently, it has bought the freehold interest in the Novotel hotel in Hammersmith, W6, for £8m.
annabel.dixon@estatesgazette.com
