Hammerson has taken full control of Leicester’s Highcross shopping centre, buying out its joint venture partner for a sum of £180 million.
Highcross was built in 2008, at an initial cost of £350 million shared between Hammerson and BIS Company Ltd, formerly known as the Royal Mail Pension Plan. This saw BIS Company Ltd take a 40 per cent share in the centre – which Hammerson acquired this week.
The 1 million sq ft plus centre currently boasts three department stores operated by House of Fraser, John Lewis and Debenhams along with a further 114 retail units. It also has a strong leisure offering, with a 12 screen multiplex Cinema de Lux and a number of restaurants including Carluccio’s and Zizzi.
Chief executive of Hammerson, David Atkins, believes full ownership will allow the firm to invest further in diversifying the centre’s retail and leisure offering.
He says; “The investments we have announced today underline our commitment to winning retail sectors which will deliver continued growth and outperformance.
“We believe that 100 per cent ownership of Highcross will enable us to increase the centre’s attractiveness to both retailers and consumers and to drive future sales performance.”
The acquisition of the remaining 40 per cent of Highcross forms a large part of a £280 million investment by Hammerson, designed to strengthen its commercial property portfolio both in the UK and overseas.
Highcross has now become one of the most profitable properties in this portfolio as, as well as being the second largest asset by area after Birmingham’s Bullring, it also generates a rental income of £27.8 million per year.
Hammerson already has a proven track record in tempting new tenants to Highcross, as big names such as Urban Outfitters, Frankie and Bennys and Hugo Boss have all recently taken up units. A Hammerson spokeswoman believes that this record is set to continue as the firm begins the process of negotiating leases with both prospective and existing tenants.
She says; “Highcross has strong income growth potential with the opportunity to increase occupancy through attracting new brands and upsizing key retailers.
“Following the successful repositioning of the St Peter’s Square dining quarter, which introduced new brands including Byron and Chimichanga, there is additional opportunity to drive future growth from the centre – this includes the creation of a new anchor on the lower mall and reconfiguring the original East Mall to provide a stronger presence and larger stores.
“Leicester has an attractive consumer catchment and is the principal shopping destination in the East Midlands; the city’s population currently ranks ninth largest nationally and is expected to grow by 3.7 per cent.”
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