Shopping centre acquisitions remain a key strategy for commercial property firms and funds, with the generous returns and growing rental value proving to be a powerful incentive for investors both at home and overseas. This has seen InfraRed Capital Partners Limited, on behalf of its Active Fund III, snap up the St George’s Shopping Centre in Preston in a deal worth around £75 million.
The fund exchanged contracts with previous owner Aviva earlier this week and has already pledged to invest further in improving the centre. This, it hopes, will encourage greater diversity within the centre’s tenant mix and will also raise footfall as local consumers respond warmly to modernisations the centre desperately needs.
At present, the centre comprises of 280,000 sq ft of retail space divided into more than 100 separate units and offers customers and employees the use of one of Preston city centre’s major car parks. Existing tenants include well known high street brands such as Poundland, New Look, WH Smith, Marks & Spencer and River Island, although it is believed InfraRed Capital Partners will seek to bring new names to the tenant mix in the near future.
Head of European real estate at InfraRed Capital Partners, Chris Huxtable, believes that the addition of the St George’s Shopping Centre will prove invaluable to the firm’s portfolio.
He says; “We are delighted to be adding St George’s to our portfolio, the seventh centre we have acquired since re-entering the shopping centre market and the third for our Active Fund III.
“St George’s is the dominant centre in the city of Preston, a Top 50 UK retail destination, where it attracts both top quality retailers and high annual footfall.
“We will be investing further in the centre, helping to make it an attractive place to shop, work and do business which will create the opportunity to bring new retailers to the heart of the city, benefiting tenants, customers and the city centre as a whole.”
InfraRed Capital Partners is steadily becoming a strong presence in the UK’s shopping centre market after taking a five year break from acquisitions during the early stages of the financial crisis. Since 2011, it has made a number of significant acquisitions including The Galleries in Bristol and St Johns and Clayton Square, both in Liverpool.
The fact that InfraRed Capital Partners has largely invested in regional areas, as opposed to sticking with the “safe” market within London and the South East, may seem surprising but is in fact a strong indicator of the growing strength of the North West as an investment destination. A growing number of developers are now recognising the need for an increase in retail and leisure destinations in the area and, as such, are snapping up valuable assets as a means of staying ahead of the curve.
Although no plans have yet been released regarding the promised future investment, it is entirely possible that St George’s will benefit from a new leisure aspect, thus bringing Preston’s major retail destination in line with many larger developments nationwide.
