Norges Bank takes 50% stake in Meadowhall

London & Stamford, the UK property group, and Green Park Investments, the Middle Eastern investment group, have sold their joint 50 per cent stake in Sheffield’s Meadowhall shopping centre to Norway’s sovereign wealth fund.

Norges Bank Investment Management, which manages the Norwegian government’s pension fund, has entered into a joint venture with British Land, the property group, which owns the other half of the shopping centre.

The deal valued Meadowhall, which attracts 24m shoppers a year, at just over £1.5bn – and countered speculation that British Land was preparing to sell up to half of its stake in the shopping centre.

Chris Grigg, chief executive at British Land, said: “Norges’ investment is a measure of the outstanding quality of Meadowhall, and we look forward to working with them to continue to develop its potential in the years to come.”

The sale has generated a healthy profit for London & Stamford which, together with Green Park, bought its stake from British Land in the depths of the financial crisis in 2009. At the time, the shopping centre was valued at just under £1.2bn.

After an initial cash investment of just under £48m, London & Stamford has received a total of £97m in cash from the deal. The agreed valuation marks a 2 per cent premium on the shopping centre’s previous valuation in March.

Raymond Mould, chairman of London & Stamford, said: “The performance of the centre has been outstanding since our acquisition in February 2009. Despite difficult trading conditions, tenant performance has been generally good and in some cases exceptional.”

Although London & Stamford’s exit took longer than analysts had expected, fears that the delay would result in a disappointing valuation proved wide of the mark. “There is no doubt that there is strong demand globally for prime UK property and therefore we believe that this sale is timely,” said Mr Mould.

The protracted sale of the stake was watched as an indicator of the health of UK shopping centres, particularly outside the south-east. “It demonstrates that stakes in shopping centres aren’t that liquid in their own right, which is useful for the rest of the sector [to know],” said Robert Duncan, an analyst at Jefferies.

The sale knocked 3.8p off London & Stamford’s net asset value per share, after the group had to revalue a bond associated with Meadowhall. Shares in London & Stamford fell 0.9 per cent to 115.8p. British Land, meanwhile, closed down 1.1 per cent at 516.6p.