The Metrocentre in Gateshead has been sold in a deal worth more than £500m. London-based property firm Landsec has beaten Mike Ashley's Frasers Group to buy the shopping centre.
There has been speculation for a number of months about the sale of the shopping centre, which has effectively been owned by the former lenders of property firm Intu since that company collapsed in 2020. Landsec, which owns a number of other shopping centres around the UK, has bought the Metrocentre from a company called Tynehawk Holdings (Jersey) Limited for £516m.
Financing and conditions of the deal
The new owners will finance the deal in part with a share offer on the London Stock Exchange. The deal is also contingent on the restructuring of outstanding bonds to Metrocentre Finance PLC, though this is expected to go through next week.
Landsec described the Metrocentre as one of the country's top retail centres and said its acquisition would give it ownership of three of the country's largest 10 shopping centres. It also owns Liverpool One, the Bluewater centre in Kent and St David's in Cardiff among a large property estate.
Landsec's view on the acquisition
Mark Allan, chief executive officer of Landsec, said: "Growing our investment in major retail destinations remains our highest conviction call, given the high income yields and attractive income growth on offer for the right assets.
"Our acquisition of Metrocentre represents a rare opportunity to obtain 100% control of a top-10 UK shopping centre. Metrocentre offers the scale, relevance and quality of catchment where demand from brands is highest, as they focus on fewer, bigger, better stores in the strongest locations. This established trend remains clear, with retail sales across our existing major retail platform up 26% since March 2022 vs 1% for the average UK market, and footfall continuing to gain market share.
"In this context, Metrocentre is exactly the type of destination where our market-leading platform can unlock further income and value growth. Our track-record in this is proven, with occupancy across our existing major retail portfolio up to a two-decade high, rental uplifts on relettings and renewals having doubled to 15%, and like for like income growth of 5.5% over the full year to March 2026."
History and current performance
The Metrocentre first opened in 1986 after property developer Sir John Hall worked with Church Commissioners to transform a former power station ash dump into one of the largest shopping and leisure complexes in Europe. It was one of the UK's first out-of-town shopping malls and transformed the retail industry.
The centre has remained popular with people in the North East, though it has been affected in recent years by changes in the way people shop. It currently has a 95% occupancy rate and total annual sales of around £650m from nearly 300 shops and other businesses.
