London & Stamford has put its 50 per cent stake in the Meadowhall shopping centre in Sheffield up for sale, just three years after it bought the trophy mall from British Land at the very trough of the property market.
The company is likely to make a fat profit on its investment, which is structured as a joint venture with a Middle Eastern sovereign-wealth fund (of which London & Stamford owns 31.4 per cent, giving it 15.7 per cent of the mall overall). The original purchase price valued Meadowhall at £1.18bn in February 2009 - 34 per cent below the last reported book value of £1.57bn. At the time, British Land was desperate for the cash and even agreed to guarantee London & Stamford's rental income for three years.
The company has yet to make a formal announcement, but there are probably two reasons why it is selling. The first is to validate its strategy and raise funds for further acquisitions. Founders Raymond Mould and Patrick Vaughan see themselves as opportunists rather than buy-and-hold investors. Secondly, the managers have long been suspicious of the wider retail market, and this suspicion may now extend to Meadowhall - particularly as their insurance policy on rental income is about to expire.
