Lend Lease and Prudential have struck a £274m deal with Hermes to sell part of their £1.1bn Bluewater shopping centre in Kent in exchange for a stake in Milton Keynes town centre.
Hermes, acting for BriTel, is to acquire a 10% stake in Bluewater for £112m, while the Pru is taking a 36% stake in Hermes’ 111,480 sq m (1.2m sq ft) Milton Keynes shopping centre for £162m.
Hermes and Prudential have also agreed to appoint Lend Lease to undertake a master planning exercise at Milton Keynes. Lend Lease is currently developing the 153,285 sq m (1.65m sq ft) out-of-town Bluewater regional centre near Dartford.
The Bluewater equity transferred is part of Lend Lease’s stake and leaves Prudential’s 35% stake in the scheme undiluted. The Pru still has an option on a further 15%.
Sources said that both schemes promise strong investment returns.
Lend Lease is to put 25% of Bluewater into a unitised fund. It emerged at the BCSC conference this week that Lend Lease has renamed the new £500m fund as the Lend Lease Retail Partnership.
The fund manager and developer said that 25 funds had registered interest in the fund – formerly known as Forward Retail Fund – by the closing date two weeks ago. The fund will hold a £280m stake in Bluewater, plus the £220m Touchwood Court which it is developing in Solihull. Lend Lease has dropped the Overgate Centre in Dundee from the fund.
Roger Lees, Lend Lease financial controller, said Dundee had been dropped because of “uncertainties regarding the anchor stores that weren’t going to be ready for the launch of the fund before Christmas”.
Among the largest funds known to be interested are Norwich Union, Equitable Life and Clerical Medical.
EGi News 6/11/98
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