Landsec agrees £516m deal for the Metrocentre

Landsec has exchanged contracts to buy 100% of the Metrocentre in Gateshead, about two miles from Newcastle city centre, from Tynehawk Holdings for a net cash price of £516m, according to its announcement to the market. The headline price was £530m before agreed reductions.

The numbers Landsec published

• Net rental income of £41m, an in-place yield of 7.9% at the price paid
• More than 16 million visits a year and about £650m of retail sales
• 1.86 million sq ft of lettable space, 95% occupied
• Funding from a £500m equity raise plus existing debt; completion expected by the end of October, subject to approvals

The deal is part of Landsec's plan to put £1bn into major retail destinations, and it would give it three of the UK's top ten shopping centres, alongside Bluewater and Liverpool One. Metrocentre's food and drink area already includes Nando's, Zizzi, Wagamama, TGI Fridays and Ask, and Chopstix has announced a unit.

What it means for groups: a landlord with Landsec's scale and its focus on leisure-led destinations usually means active asset management: re-gears, refits and new lettings. If you hold a Metrocentre unit, expect conversations about lease terms and turnover rents. If you're looking for North East sites, this is a landlord worth getting in front of early.