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

  • 11/3/2021
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Nov 3 (Reuters) - Britain"s Land Securities (LAND.L) 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 (UAI.L) 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 (ITV.L) and Ericsson (ERICb.ST), also includes residential, leisure and retail spaces. The property was a 50:50 joint venture between Legal & General (LGEN.L) 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

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