MediaCity is valued at £ 567.5 million. Credit: via carousel
Peel L&P will retain a 25% stake in the 37-hectare Salford mixed-use development, but Legal & General has left the company.
MediaCity, home of the BBC and ITV, has a gross asset value of £ 567.5 million. Landsec’s acquisition of DKK 425.6 million GBP includes debt of 293.6 million. GBP, which reduces Landsec’s equity investment to DKK 207.6 million. GBP, which is met in cash drawn from existing facilities, the company said.
Under the terms of the agreement, the investor will also have an obligation to pay an additional amount limited to £ 15m. linked to building redevelopment work that will be completed after the transaction.
The agreement sees the end of Peel L&P and Legal & Generals 50:50 joint venture; The companies have sold 25% and 50% shares to Landsec, respectively.
In addition to maintaining a 25% ownership interest, Peel L&P will be retained as asset and development manager.
Phase 1 of MediaCity was completed 10 years ago and covered 1.48m sq ft across 11 buildings, including offices and residences.
The development, which houses 2,500 people, is 96% leased to a large number of media and technology organizations and has a WAULT of almost 10 years.
It generates £ 31.1 million. of net operating income per year, which reflects a net start-up return of 5.8%.
Phase two has already seen the completion of two residential towers, The Green Rooms and The Lightbox, as well as mixed commercial development of the Tomorrow building.
This second phase has outlined planning permission for an additional 1.6m sq ft including office and residential, with an estimated GDV of £ 750m, bringing the total space for phase two to 2.3m sq ft.
“Over the last 10 years, we’ve created a unique destination that is currently unmatched in the UK due to its breadth of offerings,” said Steven Underwood, CEO of Peel L&P.
“Our new partnership with Landsec is another exciting step towards our stated vision of doubling MediaCity’s size.”
Mark Allan, Landsec’s CEO, said: “This acquisition gives us the opportunity to immediately use capital for high quality income generating assets and also to invest further over time through the development of Phase Two.
“MediaCity is a compelling addition to our portfolio that provides the opportunity to invest and further develop property with the potential to be in place from the first half of 2023.”
Wes Erlam, Director of Urban Renewal at L&G, said: “MediaCity is a successful example of our dynamic approach to profit recycling, while continuing to put our capital into work and invest in new projects that revitalize urban and urban centers throughout United Kingdom.
“By working closely with Peel since our investment in 2015, we have added more than 600,000 sq ft of built housing and are in a position today where MediaCity has welcomed over 2,500 residents and 8,000 workers to this landmark media and technology hub. . “
The MediaCity investment follows Landsec’s acquisition of Mayfield developer U + I for £ 190m.