Further development of Bluewater shopping centre is “definitely on the agenda” after Lend Lease sold its stake in the development to Land Securities for £696m, a retail expert has said.
Harper Dennis Hobbs head of retail consultancy Jonathan De Mello said: “You wouldn’t buy [Bluewater] for what it is now… [the acquisition is] about the bigger picture and the development around it.”
Further development of Bluewater is “definitely on the agenda”, he said. Mr De Mello previously worked on Lend Lease’s masterplan for Bluewater before the financial downturn.
He said the recession had stalled Lend Lease plans for residential, leisure and retail development.
Mr De Mello added that while the previous masterplan had been “very grandiose”, it highlighted Bluewater’s development potential.
However, he said Land Securities’ focus should be on its “retail core”, with complementing residential and leisure development built in phases.
Land Securities announced today that it had bought a 30 per cent stake in the Kent-based shopping centre for a cash consideration of £656m.
It also acquired the full asset management rights for the centre and 110 acres of surrounding land for an additional £40m.
A spokeswoman for Land Securities told Construction News there were no plans “at the moment” for further development. “We bought Bluewater because it is the top retail asset outside of London,” she said.
But the spokeswoman added that the Bluewater site does “link up” with Land Securities’ plans around the Ebbsfleet area and there could be “synergies” here in the future, adding that it was “a handy coincidence”.
Other stakeholders include Lend Lease Retail Partnership, which owns 25 per cent of the asset; M&G Real Estate and GIC, which hold 35 per cent; and Hermes and Aberdeen Asset Management, which own 10 per cent.
Bluewater totals 1.8m sq ft and is home to more than 330 retailers, cafes, bars and restaurants.
Land Securities retail portfolio managing director Scott Parsons said the acquisition was part of a continued “strategic shift” of the company’s retail portfolio.
Bluewater will increase Land Securities’ exposure in the South-east and follows the sale of its Overgate shopping centre in Dundee and The Bridges shopping centre in Sunderland, he said.
Mr Parsons added that the company saw opportunity to improve returns at Bluewater by reducing the shopping centre’s vacancy rate of 5.3 per cent to 2.6 per cent, in line with its retail portfolio average.
He said: “[We will do this by] combining units to provide fewer, bigger units, which are more attractive to retailers, and improving the leisure and catering offer.
“We are confident our fresh approach to asset management, together with the South-east’s strong economy, will deliver rental growth as market confidence returns.”
In May, Land Securities said new developments would be “likely to require pre-lettings” as it prepares to enter a period of de-risking and being “disciplined” about the schemes it builds.