Landsec adds Metrocentre to growing portfolio of top malls

Major UK retail landlord Landsec announced on Thursday that it has exchanged contracts to acquire a 100% stake in Metrocentre, Gateshead.

The key mall, which is around two miles from Newcastle city centre, has been owned by Tynehawk Holdings (Jersey) Limited and the deal is for a net cash consideration of £516 million.

Based on in-place net rental income of £41 million, the cash price implies an in-place net rental income yield of 7.9% and Landsec said that means “Metrocentre offers an attractive combination of a high day-one income return [and] strong future rental growth prospects”.

The acquisition is being funded through a share issue and existing debt facilities.

Metrocentre is a top-10 shopping centre destination in the UK based on sales and attracts over 16 million visitors a year. It generates retail sales of around £650 million, with 282 stores across 1.86 million sq ft. of lettable floorspace. 

The deal also includes an adjacent retail park, which covers 0.2 million sq ft of space across 15 units.

Overall occupancy is 95%, with a 4.5-year average lease term and a strong line-up of key international brands, including Apple, Sephora, Zara, M&S, Bershka, Stradivarius, Next, Lego, Primark, JD Sports and Lefties.

Landsec has been very active in acquiring key malls in recent periods and this latest deal is in line with its strategy to invest a further £1 billion in major retail assets. 

Following completion of the acquisition later this month, Landsec will own three of the top 10 and eight of the UK’s top 30 shopping centres, with major retail destinations making up around 46% of the company’s annualised rental income.

Landsec includes some big names in its portfolio such as Bluewater, Liverpool One, St David’s, Trinity Leeds, Westgate, Buchanan Galleries and more.

At the same time as the announcement it updated on trading and “since the start of this year, [it] has continued to see strong customer demand for its best-in-class assets. As a result, lettings over the five months to 31 August 2026 have been comfortably ahead of ERV [estimated rental value], with re-lettings and renewals well ahead of previous passing rent. Based on this continued positive momentum, Landsec continues to expect to deliver c. 3-5% growth in like for like net rental income for the year ending 31 March 2027”.

CEO Mark Allan said of its latest acquisition: “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 re-lettings and renewals having doubled to 15%, and like for like income growth of 5.5% over the full year to March 2026.”