Less than two months after a controversial expansion of Dalton Park was finally given the go-ahead, a global investment management company has bought the County Durham outlet centre for £38m in an off-market deal.
Despite concerns over the potential impact on shops in nearby Seaham and Peterlee, the Government decided not to intervene when a 2011 application was made for a multi-million pound upgrade to the complex near Murton.
In March this year — and a full decade after an upgrade to Dalton Park was first suggested — permission was given to add a seven-screen Cineworld cinema, a Morrisons supermarket, a KFC drive-through restaurant and a hotel to the retail park.
Now TH Real Estate has snapped up the 160,000 sq ft site and confirmed it will fund the 135,000 sq ft 12-month expansion project, which will ultimately generate up to 1,000 new jobs and is already set for an official May Day opening next year.
Built on the site of colliery slag heaps, the complex was first opened in 2003 and now has more than 60 stores including anchor outlet-style tenants Marks & Spencer, Next Clearance, Gap, Adidas and New Balance. Among its seven eateries are McDonald’s and Starbucks, with Frankie & Benny’s and Prezzo among the new signings.
“We are delighted to have secured the acquisition of Dalton Park,” commented Rob MacQueen, senior portfolio manager at TH Real Estate. “It is the major outlet centre in the North-East and our Phase Two plans will give it further critical mass and regional status.”
BNP Paribas and DTZ advised TH Real Estate during the acquisition, with Knight Frank and De Morgan & Company acting for Dalton Park owners Peveril Securities.
The investment company has appointed Realm to carry out full property asset management duties at the centre, bringing the number of retail assets managed by Realm to 15. It now controls 42 per cent of the UK’s market share, covering three-million square feet of shopping space across 1,000 separate units.
“This is an excellent mandate for Realm from a new blue-chip client,” said managing director, Colin Brooks. “We are looking forward to working with TH Real Estate, to grow the performance of the asset and ensure a smooth transition and handover of the Phase Two next year.”
Alice Breheny is global co-head of research at TH Real Estate. “Designer outlets have been one of the most widely misunderstood, but strongest performing, real estate sectors in Europe over the past decade and, relatively speaking, they thrived during the global economic downturn,” she said.
“Strong demand from international retailers means the occupier base is broadening and covenant quality is improving; likewise, the investor base is deepening. Constrained supply, coupled with growing demand, should see continued rental growth and a long-term structural improvement in investment pricing globally.”
TH Real Estate holds one of the world’s largest outlet mall portfolios. In Britain it also owns sites in Swindon, Bridgend and Cheshire.
