Land Securities takes £656m stake in Bluewater mall

Land Securities, Britain’s biggest commercial property company, has paid £656m for a 30pc stake in Bluewater, the Kent shopping centre.

It has also acquired full asset management rights for the centre and 110 acres of surrounding land for £40m.

The 30pc stake was bought from Australia's Lend Lease, which retains a 25pc interest in the centre. Other shareholders include M&G Real Estates and GIC, one of the biggest sovereign wealth funds, with 35pc and Hermes and Aberdeen Asset Management which control 10pc.

Scott Parsons, Managing Director, Retail Portfolio at Land Securities, said: "This acquisition, which increases our exposure to the South East, follows the recent disposals of Overgate, Dundee and The Bridges, Sunderland, and demonstrates the pace at which we are delivering on our strategy."

Land Securities has been shifting the focus of its retail portfolio towards "dominance, experience and convenience".

Bluewater attracts 27m visitors a year and houses more than 330 retailers, cafes, bars and restaurants, including Marks and Spencer, John Lewis, Victoria's Secret, and Zara.

Land Securities expects strong rental growth as the economy continues to recover. The overall net initial yield after expiry of rent-free periods is 4.1pc, Land Securities said.

The increase in property prices helped the company in May to report a 12.2pc rise in net asset value in the year to the end of March, a doubling of pre-tax profits to £1.1bn after a revaluation of its portfolio, and a 9.9pc increase in revenue profit.

At the time Rob Noel, the chief executive, said he did not think the property market had entered bubble territory, even in London.