Shopping centre acquisitions have slowed somewhat from the peak period in the middle of this year, yet investors remain keen to lay their hands on properties which could feasibly produce a large return. This has seen London based NewRiver Retail take ownership of Morecambe’s Arndale Shopping Centre in a deal worth £14 million, reflecting a net initial yield of almost 10 per cent.
The Morecambe Arndale has 40 retail units covering a total floor space of 107,300 sq ft and is, at present, 95 per cent let. Tenants include popular names such as Greggs, Argos and Boots, and the centre also has an adjoining hotel operated by Travelodge which has been included in the sale.
NewRiver Retail acquired the Morecambe Arndale as part of a wider deal, known as the Sands Portfolio, worth £19 million. The deal also included five high street assets located in Rugby, Nuneaton, Spalding, Blackpool and Perth, which are currently occupied by Boots, McDonalds, Halifax, Monsoon and Topshop respectively.
Property director Allan Lockhart at NewRiver Retail hints that the new owners will seek to make improvements at the Arndale in future.
He says; “Following another highly active year for NewRiver, we are pleased to continue to deliver on our careful stock selection and active acquisition strategy by acquiring the Arndale Shopping Centre in Morecambe and five nationally located high street assets at an attractive price reflecting a net initial yield of 9.75 per cent.
“The Arndale Shopping Centre offers excellent value enhancing opportunities having been impaired by a lack of investment for a number of years owing to the financial position of the previous owner.
“We are committed to improving the shopping centre with our plans to invest fresh capital and work closely with Lancaster City Council – we have identified a number of active asset management initiatives, including attracting new occupiers for an improved retail mix, a centre rebrand and refurbishment, together with improvements to the adjoining public realm, all of which will drive increased footfall and dwell time.”
This is not the first major deal NewRiver Retail has entered into during the past 12 months which concerns stand-alone high street properties, as it acquired a network of 202 pubs from Marston’s earlier in the year. Around 60 of these properties will be leased to the Co-Operative’s food division following refurbishment works to transform them into retail units, while the remaining 140 or so will also be converted for retail purposes and leased to high street chains and potentially independent brands.
As yet, no further details regarding the refurbishment works NewRiver Retail would like to conduct at the Arndale have been released, yet presumably these will follow a similar pattern to the firm’s other shopping centre acquisitions over the past few years.
This could potentially see an internal redevelopment of the centre to create additional retail space, along with a food court being established and a formal atrium or meeting area created for public use.
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