London commercial property company acquires £567.5m tech and media hub
London based Land Securities Group PLC (“Landsec”) announced it has acquired a majority stake in MediaCity, a media, digital and tech hub in Salford, Greater Manchester.
Previously owned by a 50:50 joint venture between Legal & General and Peel L&P, Landsec will partner with Peel L&P who will retain a 25 per cent stake and continue to serve as asset and development manager.
MediaCity has a gross asset value of £567.5m. Landsec will pay a net purchase price of £425.6m for the 75 per cent interest. The transaction includes £293.6m of debt (£220.2m on a proportionate basis), reducing Landsec’s equity investment to £207.6m which is satisfied in cash drawn from existing facilities.
Landsec will also have an obligation to pay a further amount capped at £15m linked to building remediation works which will be completed post-transaction.
The largest tech and media hub outside London, MediaCity produces 50,000 hours of content annually, and is home to 8,000 residents and workers. Phase one was completed 10 years ago and comprises 1.48m sq ft across 11 buildings including work space, studios, incubator labs, residential as well as ancillary leisure and retail.
Phase two has already seen the completion of two residential towers - ‘The Green Rooms’ and ‘The Lightbox’ as well as the mixed-use commercial space, the ‘Tomorrow building’.
This second phase has outline planning consent for an additional 1.6m sq ft including office and residential, with an estimated Gross Development Value of £750m, bringing the total space for phase two to 2.3m sq ft.
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.
“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.”
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.
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