The owner of the Bluewater shopping centre in Kent has struck a £516million deal to buy the Metrocentre in Gateshead.

London-listed Landsec, which also owns Liverpool One, told investors it had exchanged contracts to buy 100 per cent of the Metrocentre from Tynehawk Holdings as it expands its retail portfolio.

Tynehawk is the holding firm for a consortium of investors who took control of Metrocentre after previous owner Intu collapsed in 2020. 

It launched the sale process earlier this year, drawing interest from the likes of Mike Ashley's Frasers Group.

The FTSE 100 property group will fund the deal through a £500million equity issue, including a retail offer to UK investors, as well as existing debt.

Shares in Landsec fell 1.52 per cent to 615p in early trading.

Metrocentre attracts more than 16million visitors every year, generating retail sales of £650million from 282 stores. 

Landsec's takeover deal also includes an adjacent retail park with 15 units.

The deal is conditional on dissolving a legacy legal entity from Metrocentre's collapsed former owner Intu, a process expected to take place next month, and on consent from bondholders.

Landsec chief executive Mark Allan said: 'Growing our investment in major retail destinations remains our highest conviction call, given the high income yields and attractive income growth on offer for the right assets.

'Our acquisition of Metrocentre represents a rare opportunity to obtain 100% control of a top-10 UK shopping centre.'

The acquisition marks a further shift away from office developments towards retail space for Landsec, having previously announced plans to invest £1billion in major retail assets.

The property company also agreed on terms for a separate acquisition worth about £100million to further consolidate its retail portfolio but gave no further details.

Completion of both deals will see major retail destinations account for 46 per cent of Landsec's annualised rental income.

Earlier this week Landsec announced that it had sold 123 Victoria Street, a central London office block, for £211m - a 20 per cent discount to its listed price.

Landsec said it had seen 'strong customer demand' this financial year, with lettings growth over the five months to August 31. It expects to deliver net rental income growth of between 3 and 5 per cent for the year to March 2027.