LaSalle Investment Management has embarked on the marketing of a seven centre portfolio of secondary retail destinations on behalf of Mars Pension Funds. The portfolio includes the Kingdom Centre in Glenrothes, which has already begun to spark significant interest.
Although Mars only acquired the centre 20 months ago for £34.3 million, the current high demand for shopping centre assets has presented an opportunity for a strong return upon the fund’s initial investment.
According to market analysts, should the portfolio sell for its current estimate of £250 million, this would represent a yield of approximately seven per cent – a commendable result for a portfolio assembled during the wake of a significant country wide retail downturn.
Along with the Kingdom Centre, the portfolio includes the Exchange Shopping Centre in Rochdale, originally purchased by Mars Pension Funds for £19 million, and the Ankerside Centre in Tamworth which was acquired for £14.45 million. Making up the group are the Westside Plaza in Edinburgh, the Captain Cook Square Centre in Middlesborough, the Pyramids Shopping Centre in Birkenhead and the Airedale Centre in Keighley, West Yorkshire.
Councillor for Glenrothes and vice-chairman of the town’s area committee, Ross Vettraino, expressed a degree of surprise at the sale of the Kingdom Centre – especially given the assurances by Simon Usher of LaSalle Investment Management earlier this year that the firm (which acts as property manager for Mars) remained committed to the centre’s long term development and thereby the performance of the town’s Albany Gate area.
He said; “Maybe the owners have made a reassessment of their plans to regenerate the centre and decided they are not attainable.They made all the noises about their purchase being a long-term investment but that seems to have changed. I welcome interest shown by a potential new owner, and hope it will bring about some confidence and stability.”
A new owner for the Kingdom Centre may indeed be on the horizon, as it is understood that a joint venture partnership between Edinburgh House Group and Cerberus Capital Management has already made an offer upon a portion of the portfolio which includes the Glenrothes retail hub.
As this partnership already owns and operates a number of secondary retail destinations in the UK, this would certainly provide a solution to the uncertainty over the centre’s future.
The question of regeneration in Glenrothes has been one in the forefront of councillors’ minds for a decade now, and a number of recent setbacks have caused a degree of disquiet amongst local businesses and residents. Hopefully, the upcoming sale of the Kingdom Centre will return an element of stability to the Fife town’s major retail precinct and therefore spur on improvements in the wider area.
