The firm plans to build out the remaining phase two, which has outline planning for around 1.6m sq ft including office and residential, valued around £750m

The 37 acre media, digital and tech hub in Salford, Greater Manchester was previously owned by a 50:50 joint venture between Legal & General and Peel L&P.

Landsec will now partner with Peel L&P who will retain a 25% stake and continue to serve as asset and development manager.

The London developer will pay £423m for the 75% interest. The transaction includes £293.6m of debt (£220.2m on a proportionate basis), reducing Landsec’s equity investment to £207.6m which is satisfied in cash drawn from existing facilities.

Landsec will also have an obligation to pay a further amount capped at £15m linked to building remediation works which will be completed post-transaction.

The waterside destination is home to some of the world’s most exciting creative, tech and media brands, from BBC North and ITV to Ericsson, The Hut Group, Kellogg’s and over 250 creative and tech businesses as well as schools and universities.  

Phase one was completed 10 years ago and comprises 1.48m sq ft across 11 buildings.

It generates £31.1m of net operating income per annum, reflecting a 5.8% net initial yield.

Two residential towers – ‘The Green Rooms’ and ‘The Lightbox’ – and the award-winning  ‘Tomorrow building’ of mixed-use commercial have already been completed in the phase two development plan.

There is remaining outline planning consent for an additional 1.6m sq ft including office and residential, bringing the total space for phase two to 2.3m sq ft.

Mark Allan, Landsec CEO said: “Mixed-use developments with a clear sense of place are becoming an increasingly important ingredient in the fabric of cities. Opportunities to participate in large scale, established mixed-use developments are scarce and MediaCity is one such opportunity. 

 “This acquisition presents us with the opportunity to deploy capital immediately into high quality income producing assets and also to invest further over time through the development of phase two.”

MediaCity is a compelling addition to our portfolio, providing the opportunity to invest and further develop the estate with the potential to be onsite from the first half of 2023.

He added: “I’m particularly excited to be able to work alongside Peel, whose experience and expertise complements our own.”