Intu Properties Plc, the U.K.’s largest shopping-mall owner, agreed to buy three retail centers from Westfield Group for 867.8 million pounds ($1.4 billion) including working capital.
Intu will purchase a mall in the English city of Derby and the Sprucefield retail park in Northern Ireland, as well as a 50 percent stake in the Westfield Merry Hill center near Birmingham, the London-based company said in a statement today. To finance the acquisitions, Intu will raise about 500 million pounds in a share sale and will also raise new debt facilities of 423.8 million pounds.
The U.K.’s largest real estate companies are using their access to capital to invest in properties and developments as values rise. U.K. commercial real estate values rose for the 10th straight month in February, according to data compiled by Investment Property Databank Ltd.
The deal “is a rare and attractive opportunity to acquire a further two prime shopping centers in line with our strategy to focus on the U.K.’s largest and most successful destinations,” Intu Chief Executive Officer David Fischel said in the statement.
Intu dropped as much as 4.6 percent in London trading. The shares were down 4.3 percent to 309.2 pence at 9:20 a.m., the second-biggest decliner in the Bloomberg European 500 Index, which fell 1.5 percent.
Westfield, which owned the malls with partners, will receive 597 million pounds from the sale, in line with book value, it said in a separate statement. The Sydney-based company owns the White City mall in London and half of the city’s Stratford shopping center. Westfield plans to develop a third large-scale mall in Croydon, south of the U.K. capital, in a venture with Hammerson Plc.
Westfield in December proposed creating a separate company to manage its Australian and New Zealand properties, enabling the rest of the business to focus on expanding overseas, particularly in the U.S. and U.K.