Land Securities Acquires Additional 17.5% Stake in Bluewater

On Tuesday, Land Securities Group PLC (LON: LAND) announced the completion of a £120 million acquisition of a 17.5% stake in Bluewater, a leading UK retail destination. This increases Landsec’s ownership to 66.25%.

The acquisition aligns with Landsec’s strategy to invest in major retail centres. Based on its existing Bluewater income for the year ending March 2024, the additional stake is expected to generate £10.3 million annually in net rental income for Land Securities.

“This transaction underscores our ability to continue to create value through prime investments in scarce, major retail destinations with attractive return profiles,” said Bruce Findlay, Managing Director of Retail at Land Securities. “Bluewater is one of the UK’s top retail destinations and a key part of our strategy to further build our relationships with key brands.”

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Land Securities was recently upgraded to Buy from Neutral at UBS with a revised price target of 730p, up from 685p. The bank noted the recent underperformance in LAND shares but said it leaves the stock implying a 28% discount to net asset value, making Landsec “an attractive value opportunity to buy into the UK cyclical recovery.”

On the other hand, at the beginning of June, Land Securities was cut to Neutral from Buy at Goldman Sachs with a new price target of 670p, down from 740p. The bank said that while the UK real estate market is exhibiting signs of recovery, Land Securities has somewhat weak earnings growth prospects over the next few years.