Landsec has big plans for its Cardiff shopping centre after securing 100% ownership and buying up the former Debenhams next door.
The developer has bought the debt secured against the 50% share of St David’s shopping centre that was previously owned by intu.
The deal consisted of separate transactions with two debt holders, with the overall purchase price “a meaningful discount” to the £113m September 2022 book value.
The deal represents a net initial yield of 9.7% and an equivalent yield of 9.7%.
In a separate transaction, Landsec has also acquired the adjacent vacant Debenhams store “for a minimal sum”.
In an operational update posted this morning Landsec said: “Combined, this unlocks the opportunity to deliver its future vision for the centre, further enhancing its attraction for brands and visitors.”
Its plans include new public spaces, elevated F&B/leisure concepts and a refreshed brand mix.
Landsec said that leasing at St David’s had been strong, with 36 leases signed or in solicitors hands over the past 12 months, at an average 11% ahead of ERV. Occupancy has increased from 88.1% to 93.1%, while sales are up 15% and in line with pre-pandemic levels.
In London, Landsec has also sold a fully let leisure asset and a small non-core residential asset for a combined £49m, a 26% premium to the March 2022 book value.
Chief executive Mark Allan said: “Over the past year we have been decisive in positioning Landsec for a ‘higher for longer’ interest rate environment.
“We continue to believe that interesting opportunities will emerge as the economy transitions to a higher interest rate environment and have positioned the business to be able to respond accordingly.”
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