Landsec and British Land in talks over £800 million Meadowhall asset swap

Landsec and British Land, two of the UK's biggest commercial landlords, have reportedly held talks over a major asset swap. 

The potential £800 million deal would see Landsec acquire 50% of British Land's share in the Meadowhall shopping centre in Sheffield, with British Land in return acquiring Landsec's ten retail parks.

While talks have reportedly stalled after starting last summer, the deal could still go ahead, according to The Times.

The Meadowhall shopping centre, which is jointly owned by British Land and Norges Bank, was valued at £778.7m in March 2021, with Landsec’s portfolio of retail park gaining a £405m valuation in September.

Mark Allan and Simon Carter, the Chief Executives of Landsec and British Land respectively, are under pressure to close gaps between the book value of their assets and the stock-market value of their companies. The gaps are partly down to investors’ wariness over the future of shopping centres, which have seen a decline in value since the start of the pandemic.

In January 2022 British Land revealed that it had managed to collect less than half of the rent due from rental of its physical spaces, as two-thirds of tenants were forced to close.

In December last year Landsec confirmed the acquisition of an additional 25% share in Bluewater Shopping Centre from Lendlease Retail Partnership for £172 million, and by May 2022, following a separate deal, Landsec’s ownership of Bluewater is expected to be 48.75%.