The Grosvenor Shopping Centre in Chester has been under the close scrutiny of property advisors for some time, with its recent £5 million investment seeing large scale improvements made to the mall’s rear entrance on Pepper Street. It has come as something of a surprise, therefore, that owners have now made the decision to place the property on the market with a price tag of £67 million.
At present, tenants in Chester’s largest shopping centre include TX Maxx, Sports Direct and Debenhams, along with restaurant brands including Piccolino and Patisserie Valerie. The centre will also welcome four new restaurants in an £8 million conversion of the current Habitat store which will create a new food court for consumers to benefit from.
Current joint owners Bride Hall Estates, based in London, and the Carlyle Group, a US based global asset management firm, purchased the Grosvenor Shopping Centre in 2008 as part of a “top of the market” acquisition worth £286 million which included two other malls.
However, both of the other retail properties in the deal have already been sold on: The Broadwalk centre in London was acquired by Scottish Widows in 2012 for £70 million, while the Ashley centre in Epsom, Surrey, was sold to CBRE Global Investors for £78.5 million only last year.
Should the joint partnership sell the Grosvenor Shopping Centre for the currently advertised price, therefore, they stand to make a £70.5 million loss on the originally purchased portfolio, not including any investments or improvement costs made during the ensuing period. It is hardly surprising, therefore, that market analysts are speculating that the latest sale represents an attempt to “cut losses”.
Given the recent spate of improvements, the 250,000 sq ft shopping centre could prove to be a bargain purchase for any major retail property investors, especially given the development’s strong location within Chester. The rear of the centre backs on to a major transportation thoroughfare and there is an NCP car park nearby, providing excellent access for consumers and staff members alike.
Yet Strutt and Parker, who have been engaged to conduct the selling process, are bound to face questions from potential buyers regarding the reasons for the sale – especially given the high level of investment the owners have channelled in to the development in the past few months. Hopefully, this will not prove too much of a dissuader and the Chester shopping centre will be able to flourish as consumers continue to up their non-essential spending during the economic recovery.
