British Land Co. (BLND) gained the most in three weeks in London trading after the Times newspaper said the company may raise about 550 million pounds ($783 million) by selling 50 percent of the Meadowhall shopping center.
The stake in the mall in the northern English city of Sheffield may be bought by London & Stamford Property Ltd. (LSP), a U.K. investment company, and an Abu Dhabi fund, according to the report. British Land, Britain’s second-largest real estate investment trust, and London & Stamford declined to comment.
“This could take the pressure off British Land as far as fund raising is concerned,” Mike Prew, an analyst at Nomura International in London with a “reduce” rating on the stock, said in a note to investors today.
Real-estate companies are selling assets to repay debt to avoid breaching the terms of bank loans. U.K. property analysts including Merrill Lynch & Co.’s Bernd Stahli estimate companies may have to raise as much as $20 billion this year to strengthen their balance sheets.
British Land gained 37.75 pence, or 8.8 percent, to 468.75 pence, valuing the REIT at 2.4 billion pounds. London & Stamford advanced 5 pence, or 4.7 percent, to 110.5 pence on London’s Alternative Investment Market, the highest since February 2008. The company is in discussions about buying properties, it said in a statement today.
British Land paid 1.17 billion pounds for Meadowhall in 1999, a record amount for a U.K. property. In 2007, the London- based company abandoned an attempt to sell 75 percent of the mall, saying it was unlikely to achieve an appropriate price because of disruption in financial markets.
At the time, the property was valued at almost 1.7 billion pounds. Meadowhall is the third largest shopping center in the U.K. with 133,100 square meters (1.4 million square feet) of space according to information services provider Experian.
Land Securities Group Plc (LAND), the U.K.’s largest REIT, is close to selling its 33 percent stake in the Bullring shopping center to an Australian government fund for 200 million pounds, the Times said. The Bullring, in the city of Birmingham, is the U.K.’s most visited shopping center, according to its Web site.
“We have made it clear we would consider selling our stake,” Land Securities spokesman Donal McCabe said. “We are not commenting on whether we are in discussions or with whom.”
Hammerson Plc (HMSO), which also owns 33 percent of the Bullring, isn’t considering selling its stake, spokesman Chris Smith said. Henderson Group Plc, the mall’s other owner, didn’t immediately respond to requests for comment.
Land Securities gained 16 pence, or 2.5 percent, to 650 pence in London.
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