UK markets open in 5 hours 21 minutes
  • NIKKEI 225

    +311.55 (+1.09%)

    +24.71 (+0.10%)

    -0.14 (-0.19%)

    +6.30 (+0.35%)
  • DOW

    +492.40 (+1.40%)

    -304.42 (-0.79%)
  • CMC Crypto 200

    -11.95 (-0.90%)
  • ^IXIC

    +461.76 (+3.03%)
  • ^FTAS

    +61.16 (+1.49%)

UK's Landsec increases bet on mixed-use properties with MediaCity deal

  • Oops!
    Something went wrong.
    Please try again later.
·2-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

By Aby Jose Koilparambil

(Reuters) - Britain's Land Securities has announced its second acquisition in the mixed-use property sector in a week, betting on growing demand for sites that combine commercial and residential spaces in the wake of the COVID-19 pandemic.

Landsec said on Wednesday it had bought a 75% stake in Greater Manchester-based MediaCity, the UK's biggest tech and media hub outside London, for $580 million. The deal came two days after it announced the purchase of regeneration firm U+I for $260 million.

Many UK landlords are looking to diversify into mixed-use properties as the pandemic erodes the valuations of retail and office spaces.

Landsec Chief Executive Mark Allan said the company's mixed-use portfolio would surge five-fold from present levels to represent 20%-25% of its overall portfolio in the next four to five years.

"There's more desire from people to have more of that immediacy within their local area rather than having to travel a long way to work," Allan said in an interview.

"Mixed-use neighbourhoods are becoming increasingly important in terms of the fabric of cities."

MediaCity, a 37-acre waterside property that houses the offices of BBC North, ITV and Ericsson, also includes residential, leisure and retail spaces.

The property was a 50:50 joint venture between Legal & General and Peel L&P, which will now retain a 25% stake and serve as an asset and development manager.

Allan said office utilisation at Landsec properties today was still only around 45%. By spring the number of people in central London at any point in time would still be some 20% below pre-pandemic levels as people adopt hybrid working models, he added.

($1 = 0.7322 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Ramakrishnan M. and Jan Harvey)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting