Now Landsec looks north to swoop for Media City

COMMERCIAL landlord Land Securities has expanded its empire northwards after snapping up a majority share of Media City, a massive tech and media hub which is based in Salford, Manchester.

The FTSE 100 firm will pay £426m for a 75pc stake in the 37acre site, which hosts the BBC and ITV as well as over 250 companies including The Hut Group, Kellogg’s and Swedish telecoms outfit Ericsson.

It is the largest hub of its type outside London, and home to 8,000 residents and workers.

Media City was previously owned in a joint venture between asset manager Legal & General and developer Peel.

Following Land Securities’ purchase, Peel will own the remaining 25pc of the property. Landsec will pay £207.6m of the price in cash, while also taking on some of its debts.

The company is planning to invest in phase two of Media City’s development plans, which include the completion of two new residential towers, The Green Rooms and The Lightbox, as well as The Tomorrow building, a mixed-use commercial space.

The move on Media City is the company’s second acquisition so far this week.

It agreed a £190m swoop to buy smaller rival U and I Group on Monday. Landsec offered 149p per share, a 73pc premium to U and I’s closing price the day before the deal was announced.

Analysts at broker Shore Capital said that the Media City deal showcased ‘the attraction of regional office assets’ as well as the potential for development in areas of the country other than London.

‘We see the UK regions offering genuine attraction for real estate investors,’ the broker said yesterday, noting that ‘greater occupier demand’ was driving up regional rents faster than in central London.

The analysts added that the deal ‘should underline the serious intent with which major [real estate investment trusts] now view regional investment opportunities’ and that they would ‘not be surprised to see more of it to come’.

Land Securities shares dipped 0.2pc, or 1p, to 678.6p.