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£469M Midlands Shopping Centre Sell-Off As Japanese Investors Close In

John Lewis building at Highcross Shopping Centre

Stakes in two Midlands shopping centres are for sale at a combined price of £469M as investor interest grows in an under-appreciated sector.

The potential sales — by intu at its 1.3M SF Derby mall, and Hammerson at the 1M SF Highcross Leicester — have raised hopes that shopping centres are coming back into favour with investors, and suggest a long-anticipated wave of Japanese investment could now reach the Midlands.

Intu is pondering a sale of either 50% or 100% of its Derby mall valued at £458M, Estates Gazette reports. The centre is anchored by Marks & Spencer, Debenhams, Sainsbury’s and Next.

In a separate move Hammerson is close to a sale of 50% of Highcross to a Japanese investor advised by M&G Real Estate, EG said. The half-sale share would change hands for £240M, a yield of 5.5%.

Disposals also help resolve portfolio issues for both intu and Hammerson after the collapse of their merger plan in April.

The sales come as one of Japan’s largest pension funds is considering making its first investments in overseas real estate, by buying into a large, low-risk property fund. Japan Post Holdings is in talks to buy a stake in the £2.8B Royal London U.K. Real Estate Fund.

Japanese investors, who have spotted an opportunity in the poorly regarded shopping centre market, have already bought this year in Norwich and Eastbourne.