Development Securities has used the profit from an investment portfolio to acquire the non-food element of a North-East shopping centre. The London-based company paid more than £19m to acquire a 185,000 sq ft share of The Killingworth Centre from supermarket giant Morrisons.
Completed in 2000, The Killingworth Centre is the Newcastle suburb’s main retail venue, five miles from the city centre. The covered shopping mall includes a 73,000 sq ft Morrisons food store — which is not included in the sale — and almost 180,000 sq ft of other retail units.
Fully let, the acquisition’s biggest sitting tenant is a 70,000 sq ft Matalan store. Among the other national and local occupiers are Poundworld, Wilkinson, the Card Factory and Boots.
“The Killingworth Centre is a popular and well-located shopping centre that dominates Killingworth’s retail provision meeting all the modern day requirements of the convenience-focussed consumer,” commented Development Securities’ Matthew Weiner.
“This high-yielding asset has a stable occupier base and strong footfall which is driven by the Morrisons food store, one of the best performing stores within their portfolio and which will remain outside of our ownership.”
The £19.2m North-East deal is the second for Development Securities in less than two weeks. It has just paid £15.5m for the Chill Factore, Manchester’s indoor ski slope and retail complex.
Covering 167,000 sq ft — and visible from the M60 motorway and adjacent to the intu Trafford Centre — the Chill Factore has an 180m indoor real snow ski slope, the longest in the UK, as well as an international standard climbing wall and 16 shops and restaurants.
Completed through a joint venture with Pemberstone Investments, rental from the retail and restaurant tenants and other franchise holders will earn its new owners around £1m a year. Among the tenants are Nando’s, Snow and Rock, Evans Cycles and JD Wetherspoons.
“Further to our acquisition of the Chill Factore earlier this month,” continued Weiner, “we have now reinvested all of the proceeds from the investment assets that were sold over the past year, recycling the capital into high yielding investment properties with stable income streams and which are better positioned to benefit from structural changes in the retail market.
“Our focus remains on convenience retail schemes and alternative assets where we can proactively drive value through asset management and enhancement initiatives.”
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