British Land has agreed to sell its 50% stake in the Meadowhall shopping centre in Sheffield to its partner, Norges Bank Investment Management, for £360m.

The sale follows the disposal of British Land’s share in some ancillary land by the joint venture for £7m earlier this year.

As a result, these deals now value the entire Meadowhall estate at £734m.

Chief executive at British Land, Simon Carter, said: "We have had a successful partnership with Norges over many years and are delighted to continue to work alongside them as asset managers of the centre.

"Following the sale of Meadowhall, 93% of our portfolio is now in our preferred segments of retail parks, campuses and London urban logistics.

"We will continue to grow our retail park portfolio; with low capex requirements parks offer attractive cash returns and at 99% occupancy we are delivering strong rental growth."

Following the transaction, proceeds after net debt of round £200m are expects to total £156m.

As part of the deal, British Land will remain as asset manager of Meadowhall shopping centre, for which it will continue to earn fees in line with current terms.

The transaction is expected to complete in July 2024 and the proceeds will be used by British Land for general purposes, including reinvestment into retail parks.

Head of financial analysis at AJ Bell, Danni Hewson, added: "Retail estate investment trust British Land has worked hard to re-position its portfolio to capitalise on changing shopping habits.

"The disposal of its stake in Sheffield’s Meadowhall centre is something of a milestone, reducing British Land’s exposure to covered shopping centres. After the sale just seven percent of its portfolio won’t sit within its preferred segments of retail parks, campuses and London urban logistics.

"Consumer habits have changed since the late 1990s when the company shelled out over a billion pounds for the centre. This deal values the entire estate at considerably less and judging by today’s share price reaction investors aren’t exactly pleased by the numbers even if they understand the reason for the depreciation."

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