British Land puts Meadowhall stake up for sale

* Selling a 25 percent share in Sheffield shopping mall

* Comes after London & Stamford 50 pct stake sale

By Brenda Goh

LONDON, Feb 9 (Reuters) - British Land has put half its 50 percent stake in the Meadowhall shopping centre in Sheffield up for sale, two sources familiar with the talks said.

That means a three-quarters stake in the mega-mall is now up for grabs: the other 50 percent of Meadowhall is already being sold by London & Stamford.

Valued at 1.42 billion pounds ($2.25 billion) at British Land's annual results in May, the 21 year-old shopping centre is the company's third biggest property after two in London that include the Broadgate office complex in the financial district.

Retaining half its stake in the shopping centre would allow British Land to retain management of Meadowhall. The company's Chief Executive Chris Grigg declined to comment on its intentions in a conference call on Thursday.

"It would allow them to recycle capital into some of their other schemes," Peel Hunt analyst James Carswell told Reuters. "It's a good opportunity as Meadowhall has performed well."

Investors with the cash to buy into such large projects include the Singaporean sovereign wealth fund, the Government of Singapore Investment Corporation, and Malaysian and Canadian pension funds.

Meadowhall, along with Capital Shopping Centre's Metrocentre in Gateshead, was part of the first wave of British mega-malls built in the 1990s.

British Land bought Meadowhall in 1999 for 1.17 billion pounds and sold a 50 percent stake to London & Stamford and a Middle Eastern partner for 588 million pounds in 2009.

Large UK shopping centres that dominate their catchment area like Meadowhall are highly prized by property investors as they have so far managed to weather the tough retailing climate better than the rest of the UK.

Australian developer Westfield, British Land and Hammerson are among parties vying to redevelop an ageing mall in Croydon, South London, illustrating the strong demand for such assets.

British Land reported a 0.3 percent rise in its net asset value to 593 pence per share in the three months ended 31 December on Thursday.

"With the eurozone issues still unresolved and the impact of austerity adversely affecting consumer spending in the UK, we remain cautious about near-term prospects, particularly in the retail market," the company said in a statement.