Property developer Land Securities has set aside hundreds of millions to acquire more shopping centres over the coming months.
While the majority of landlords have avoided buying large malls in recent years, Landsec is confident the biggest and best “destination” malls will remain relevant in the future, The Times reported.
It has designated the best part of £600m to spend on snapping up more assets, some of which it spent increasing its share in Bluewater shopping centre this year.
On Friday (15 November), Landsec CEO Mark Allan insisted he was “confident” in deploying more of the cash during the next six months or so.
He explained: “What we’re not trying to do is buy up various shopping centres that aren’t in that top 1%.
“For the very best [malls], no one is building any more of these things; they cost twice as much to build as they’re worth today, so if you own really good, catchment-dominant retail, retailers and shoppers will concentrate in that space.”
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Allan claimed there were various deals the firm was eyeing where he was “confident in deploying capital in the second half” of Landsec’s financial year.
The exec estimates that rents for “prime” shopping centres have dropped by a third from their 2016 peak, but are now beginning to rise again.
Allan said: “Whether it’s brilliantly located central London offices with great sustainability credentials or catchment-dominant major retail destinations, the theme is the same: best-in-class assets are materially outperforming.”
Landsec joins Frasers Group in expanding its shopping centre portfolio, with the group snapping up a trio of malls across the UK in October as it doubled down on growing its property portfolio.
The retail giant acquired Princesshay Shopping Centre in Exeter, Kent’s Fremlin Walk Shopping Centre, and Olympus Centre retail park in Gloucester.
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