The Abu Dhabi Investment Authority (ADIA) has sold its 69% stake in Liverpool ONE, one of the UK’s leading shopping centres, to Landsec. The transaction, including the sale of Grosvenor’s 23% stake, gives Landsec a 92% ownership of the property for a total consideration of GBP 490 million. Of this amount, GBP 35 million is deferred for two years.
Landsec expects an income return of approximately 7.5% on its initial outlay of GBP 455 million, it said in a press release on Wednesday. The rental income of Liverpool ONE is currently 4% below the estimated rental value (ERV). Landsec anticipates significant growth in rental income through its operating platform, strong brand relationships, and further ERV growth.
This acquisition aligns with Landsec’s strategy to focus on major retail destinations, utilising proceeds from its earlier GBP 464 million in non-core asset sales. With this transaction, Landsec now owns and manages seven of the UK’s top 30 shopping centres, further consolidating its presence in urban retail and leisure markets.
Opened in 2008, Liverpool ONE attracts 22 million visitors annually and has seen a 5% increase in retail sales over the past year. Recent lettings and renewals have been signed at rates above previous rents, with occupancy at 96%. Notable new leases include brands such as M&S, Sephora, Uniqlo, and Zara.
The transaction includes performance-related provisions with ADIA, and Landsec estimates the investment will deliver an unlevered internal rate of return (IRR) in line with its guidance. The deal adds approximately 2.7 percentage points to Landsec’s loan-to-value (LTV) ratio and is expected to contribute 1.3 pence to earnings per share (EPS) annually after refinancing the asset’s secured debt.
“The top 1% of the UK’s shopping destinations provide brands with access to 30% of all in-store retail spend, which is why we continue to see brands focus on fewer, but bigger and better stores in the best locations,” said Mark Allan, CEO at Landsec. “As such, I am delighted that we have added another top-ten centre with a highly attractive return profile – meaning our unique portfolio now includes seven of the top 30 centres in the UK. Liverpool ONE already has a great line-up of brands in a thriving location and we look forward to building on this with our leading operating platform to further add to its exciting growth story.”
“Liverpool ONE is a phenomenal destination and we’re incredibly proud of what we’ve accomplished with and for the city over the last 25 years,” said James Raynor, CEO of Grosvenor Property UK. ” Looking ahead, we have ambitious plans to grow and diversify the business and we will reinvest the proceeds from the sale in our core portfolio including our 10-year programme of investment in London and residential debt business, which has supported the delivery of 3,370 homes in just two years.”
