One of the UK's largest shopping centres, the Metrocentre in Gateshead, has formally come to the market.
Metrocentre is a "super regional mall" comprising 2 million square feet. Knight Frank has put the long leasehold on the market and is understood to be seeking in excess of £500 million or a day-one yield in excess of 8%.
This morning Landsec CEO Mark Allan confirmed it was one of the UK malls the REIT was eyeing as it seeks to buy up to £1 billion of major retail complexes in the medium term.
Sovereign Centros, now part of CBRE, took over its running as asset manager in October 2020 after owner Intu collapsed into administration.
The shopping centre's leasehold sat in the Intu Metrocentre Finance securitisation of a £485 million interest-only fixed-rate commercial mortgage loan. GIC Real Estate bought a 36% share of the freehold interest in the shopping centre for £1.2 billion in 2007, sitting alongside the company that became Intu. The Church Commissioners owns 10% of the freehold.
The borrower to the securitisation launched the proposed exit sale process on 11 May saying it has reached agreement with noteholders together representing 89.2% to proceed. Noteholders have until 4pm on 26 May to object.
A formal agreement was reached between the owners of the Metrocentre and Gateshead council earlier this year to develop Metro Riverside, a major mixed-use development on the south bank of the River Tyne.
The Metrocentre was the brainchild of John Hall, a miner’s son who bought the site for £100,000. When it first opened its doors to the public in 1986, it became the largest shopping centre in the UK.
The Metrocentre Partnership announced it had secured a £70 million refinancing with Lloyds in November, which will lower its cost of capital and provide more runway for capital expenditure and working capital requirements.
In recent times the mall has thrived as the partnership undertakes an £88 million programme to upgrade the asset by the end of 2027. As part of the upgrade, £60 million had been invested by the end of 2025, with upgrades including a £3.1 million solar panel scheme and up to 174 electric vehicle charging points.
Footfall reached 16 million visitors in 2025 and there was footfall growth of 5.4% in the 13 weeks to 28 March 2026. Net operating income had increased to £39.7 million at 31 March 2026, up 8% year on year, from £36.7 million at 31 March 2025. At 31 March 2026, physical occupancy, excluding non-trading units in administration, was 89.3%, up 3% points from 86.3% at 31 March 2025.
Recent lettings are to retailers Bershka, Hollister, Lovisa, Lefties, Sostrene Grene, Swatch, experiential leisure concept Activate, Japanese-inspired restaurant, Maki & Ramen and café, Black Sheep Coffee, as well as Tesla and investment for the expansion of the NHS Community Diagnostic Centre.
A spokesperson for Metrocentre said: "Metrocentre’s sustained strong performance, combined with increased interest from investors in the attractions of such major retail and leisure destinations, has led Metrocentre to move forward with a sale process to support the next phase of its development.
"A targeted investment programme of over £60 million since late 2020, led by Sovereign Centros, has transformed the centre – attracting strong occupancy across a diversified tenancy mix including exciting new brands and upgrades and expansions for existing operators. This helped drive footfall to reach 16 million for the first time since the pandemic last year, in turn supporting strong income progression.
“It is early days in this process, so the team is fully focused on ensuring the centre continues to thrive, as one of Europe’s most extensive retail and leisure destinations, by supporting its tenants, delighting its customers, and driving growth in the North East region."