While demand for high street retail property remains mixed, there is no shortage of interest in retail parks and shopping centres, with British Land the latest to benefit from an upturn in the market.
The property investment firm has this week successfully closed two sales this week; the first concerning St James Retail Park in Dumbarton, and the second Cwmbran Retail Park. In total, the deals were worth £78 million, with St James Retail Park selling for £45.75 million (a net initial yield of 5.9 per cent) and Cwmbran Retail Park netting the firm £32.3 million (a net initial yield of 6.4 per cent.)
St James Retail Park was snapped up by The Legal and General Property Trust, and certainly seems to be a good investment – the 250,000 sq ft park has several strong tenants in place already, with anchors including Asda, Homebase and M&S Simply Food.
Cwmbran Retail Park, meanwhile, was sold to UBS, and the firm is expected to continue working with tenants such as TK Maxx, Currys/PC World and B&Q in order to maintain the 136,000 sq ft development’s image as a strong local retail destination.
Head of retail for British Land, Charles Maudsley, said; “These sales are in line with our strategy to further focus our retail portfolio on high quality, locally preferred shopping destinations.
“Over the last 12 months, we have sold £386 million of retail assets which is broadly matched by the acquisitions we’ve made.
“Our most significant acquisition was SouthGate, a high quality shopping centre in Bath.”
Yet while sales of retail developments are benefiting developers and investors, they are also benefiting local communities – as in the case of London-based regeneration and development firm Squarestone’s latest acquisitions. The firm this week purchased The Kyle Shopping Centre and Arran Mall, both located in Ayr town centre, from administrators Begbies Traynor for an undisclosed multi-million pound sum.
Both of the shopping centres entered administration last June after a severe drop in footfall, but Squarestone believes that it will be able to transform the centres, through a combined project, into a “vibrant community hub”. It is expected that the firm will utilise an adjacent development site in Carrick Street, which was also included in the sale, to act as some form of link between the centres.
Joint administrator at Begbies Traynor, Paul Dounis, says; “Since last summer, we have worked hard to make the shopping centres more attractive to potential purchasers, consolidating many of the existing tenancies and securing agreements with key tenants.
“This deal is great news for Ayr and we’d like to thank the council for their support in working with us to find a solution that benefits the local community.”
At present, the combined floor space of the two centres amounts to 125,000 sq ft divided into a total of 53 shop units. There are also 6,700 sq ft of office space situated above the Arran Mall, which could be transformed into Grade A space for Ayr’s growing business population.
While no future plans are yet set in stone, Squarestone has confirmed its intention to submit redevelopment plans to the council by the end of 2014.
