The Crown Estate has formed a £345m partnership with a Chinese state-backed property group to buy one of the UK’s biggest retail parks.
The acquisition of the Fosse Retail Park in Leicestershire is the largest acquisition in the company’s near 1,000-year history and gives Gingko Tree — an investment arm of China’s foreign exchange regulator — a 50 per cent stake in the 560,000sq ft shopping complex.
Seen as yet more evidence that chief executive, Alison Nimmo, is steering the Crown Estate toward more entrepreneurial enterprises the joint venture is the latest in a series of high value commercial tie-ups.
“At Fosse Park we intend to bring the same vision and progressive approach to management as we are known for across our regional retail holdings and in London’s West End,” said James Cooksey, head of the Crown Estate’s regional portfolio.
Last week, the estate announced it had teamed up with Norway’s Norges Bank Investment Management to buy a majority stake in the Pollen Estate which owns 730,000sq ft of London West End property.
As Chinese sovereign wealth funds continue to diversify their investment portfolios, Gingko accounted for nearly two-thirds of the £2.3bn of European real estate purchased by Chinese investors last year. Its purchases included office blocks in the City of London and Manchester.
Fosse Park, sold by the property company Foyleside as part of a refinancing deal, attracts more than eight-million shoppers a year. Situated between Leicester and junction 21 of the M1 motorway it has Marks & Spencer, Boots, Gap, DFS, Next, Costa Coffee and River Island among its tenants.
Once among a trio of UK and Irish retail sites owned by companies associated with former Ulster Television chairman John B McGuckian and his partner Ken Cheevers, their £360m acquisition of Fosse Park made history in 2006 when it became the UK’s largest retail property purchase for more than a decade.
Earlier this year, it was revealed the 40-unit centre could expand by a third after three companies, including its then owners Foyleside, had attempted to buy an adjoining key plot of land. The brewer and pub chain owner Everards intends to sell its 13-acre Castle Acres headquarters next door to the out-of-town shopping centre and relocate to a new Leicestershire site further up the M1.
The Crown Estate, which was first linked with the park in June, has refused to comment on the purchase, other than saying: “Fosse Park is one of the best assets of its kind, combining a prime location, with both scale and opportunities to enhance performance through active management.”
However, Martin Herbert of property experts Space Retail Property Consultants, feels certain the organisation will open negotiations with company. “The Crown Estate would be able to pay a premium for Castle Acres, relative to other property firms,” he said.
“It would just create a more significant retail destination and an expanded Fosse Park would be able to quickly fill the new space because of the huge demand from retailers looking for premier locations.”
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