Landsec acquires majority stake in Salford’s MediaCity for €502m

Landsec acquires majority stake in Salford’s MediaCity for €502m

Landsec has acquired a majority stake in MediaCity, the 37-acre media, digital and tech hub in Salford, Greater Manchester previously owned by a 50:50 JV between Legal & General and Peel L&P. Landsec will partner with Peel L&P who will retain a 25% stake and continue to serve as asset and development manager. MediaCity has a gross asset value of €669m (£567.5m). Landsec will pay a net purchase price of €501.8m (£425.6m) for the 75% interest. The transaction includes €346m (£293.6m) of debt (€259.6) £220.2m on a proportionate basis), reducing Landsec’s equity investment to €244.8m (£207.6m) which is satisfied in cash drawn from existing facilities. Landsec will also have an obligation to pay a further amount capped at €17.7m (£15m) linked to building remediation works which will be completed post-transaction. The waterside destination is home to some of the world’s most exciting creative, tech and media brands, from BBC North and ITV to Ericsson, The Hut GroupKellogg’s and over 250 creative and tech businesses as well as schools and universities.  The biggest tech and media hub outside London, MediaCity produces 50,000 hours of content every year, and is home to 8,000 residents and workers.

 

Mark Allan, Landsec CEO said: “Mixed-use developments with a clear sense of place are becoming an increasingly important ingredient in the fabric of cities. Opportunities to participate in large scale, established mixed-use developments are scarce and MediaCity is one such opportunity. This acquisition presents us with the opportunity to deploy capital immediately into high-quality income-producing assets and also to invest further over time through the development of phase two. MediaCity is a compelling addition to our portfolio, providing the opportunity to invest and further develop the estate with the potential to be onsite from the first half of 2023. I’m particularly excited to be able to work alongside Peel, whose experience and expertise complements our own.”

 

Steven Underwood, Peel L&P CEO said: “In the past 10 years we have created a unique destination, currently unrivalled in the UK for its breadth of offering, from global content creation and innovation to waterside living and leisure. Our successful partnership with L&G over the past six years has made possible great strides in MediaCity’s phase two delivery, seeing over 60,000ft² of commercial space, a 110 room hotel and 750 apartments added to MediaCity over that period. Our new partnership with Landsec is another exciting step towards our stated vision to double the size of MediaCity. As MediaCity enters its 11th year we look forward to working alongside Landsec whose ethos and vision are aligned with ours, to deliver MediaCity’s global potential benefitting all MediaCity’s local, regional and national stakeholders.”  

 

Wes Erlam, Director of Urban Regeneration, L&G: “Complementing our significant wider regeneration of Salford, MediaCity is a successful example of our dynamic approach to recycling profits as we continue to put our capital to work, investing in new projects which are reviving town and city centres across the UK.  Working in close partnership with Peel, and leveraging our combined deep sector expertise, since our investment in 2015 we have together added over 600,000ft² of built accommodation and are in a position today where MediaCity has welcomed over 2,500 residents and 8,000 workers to this landmark media and tech hub.  And in Greater Manchester as a whole, we have invested over 471.6m (£400m) into new homes, life sciences and media and technology. As MediaCity now reaches its next stage of maturity, this sale enables us to release growth capital for deployment into new opportunities, as we continue to identify early-stage projects and ventures where we can create significant value.”

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