London commercial real estate company acquires £ 567.5million tech and media hub

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London-based Land Securities Group PLC (“Landsec”) has announced that it has acquired a controlling interest in MediaCity, a media, digital and technology center located in Salford, Greater Manchester.

Previously owned by a 50/50 joint venture between Legal & General and Peel L&P, Landsec will partner with Peel L&P which will retain a 25 percent stake and continue to serve as an asset and development manager.

MediaCity has a gross asset value of £ 567.5million. Landsec will pay a net purchase price of £ 425.6million for the 75% stake. The transaction includes £ 293.6million of debt (£ 220.2million on a pro rata basis), reducing Landsec’s equity investment to £ 207.6million which is satisfied in cash drawn from existing facilities.

Landsec will also be obligated to pay an additional amount capped at £ 15million related to the remediation work on the building which will be completed after the transaction.

The largest technology and media hub outside of London, MediaCity produces 50,000 hours of content per year and is home to 8,000 residents and workers. The first phase was completed 10 years ago and comprises 1.48 m² spread over 11 buildings comprising workspaces, studios, incubation laboratories, residences as well as leisure and retail businesses.

Phase two has already seen the completion of two residential towers – “The Green Rooms” and “The Lightbox” as well as the mixed-use commercial space, the “Tomorrow building”.

This second phase has a building permit for an additional 1.6m² of floor space comprising office and residential accommodation, with an estimated gross development value of £ 750 million, bringing the total space from phase two to 2.3 m².

Mark Allan, CEO of Landsec, said: “Mixed-use developments with a clear sense of place are becoming an increasingly important ingredient in the urban fabric. Opportunities to participate in established large-scale and mixed-use developments are rare and MediaCity is one such opportunity.

“MediaCity is a compelling addition to our portfolio, providing the opportunity to invest and further develop the domain with the potential to be on site from the first half of 2023. I am particularly delighted to be able to work alongside Peel, whose experience and expertise complement ours.

Wes Erlam, Director of Urban Regeneration, L&G: “Complementing our important larger regeneration of Salford, MediaCity is a successful example of our dynamic approach to recycling profits as we continue to put our capital to work, investing in new projects that revive city and town centers across the UK.

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