Landsec closes in on £500m Metrocentre acquisition

Landsec is reportedly close to completing a deal worth approximately £500 million for Gateshead’s Metrocentre, with the property giant potentially seeking shareholder funding for the acquisition, according to The Times.

The proposed purchase would give Landsec control of one of the UK’s largest shopping centres, following competition from Frasers Group and Hammerson.

Earlier this year, the Metrocentre Partnership put the centre up for sale. The asset is owned by a group of investors that acquired it after Intu - a major corporate shopping centre operator and the centre's former owner - entered administration in 2020. 

Metrocentre performance and investment

More than £60 million has been invested in upgrades at Metrocentre by the Metrocentre Partnership in recent years. This work included refurbishing The Crescent, a 10,000 sq ft retail destination intended to support local and independent brands.

In March, Metrocentre said that footfall had exceeded 16 million since the pandemic for the first time, after rising 5.4% annually. It attributed the improvement to a Sovereign Centros-led investment programme that brought changes to the centre, introduced new brands and upgraded facilities for existing operators.

The centre has continued to secure retailer investment during the sale process. In July, New Look opened its biggest concept store to date at Metrocentre, taking up 11,000 sq ft in the Red Mall. The store includes expanded womenswear and accessories ranges, as well as digital browsing and services for Click & Collect, order-in-store and self-service returns.

Stradivarius and Hollister have also joined the fashion offer over the past year, while Bershka and Lefties have been signed for future openings.

Wider development plans

The shopping centre forms part of a 52-acre brownfield development area planned to become Metro Riverside, a 4,500-home neighbourhood being advanced through an agreement involving Metrocentre and Gateshead Council.

Plans include homes, retail, a hotel, workspaces and leisure facilities. The proposed MetroGreen Area Action Plan included 990 homes around Metrocentre by 2030, with the wider district planned around a “20 minute destination” model.

Landsec’s acquisition would extend beyond ownership of the existing retail asset, bringing the group into a development area that includes future residential and commercial uses.