Housing association buys Princes Mead shopping centre
Knight Frank Investment Management has sold the Princes Mead shopping centre site in Farnborough to Sovereign Housing Association, on behalf of Local Pensions Partnership Investments.
The 7.77-acre site was bought for £17.6m, reflecting an 8% net initial yield.
KFIM said it has secured support from the local authority through the planning pre-application process for a major residential-led redevelopment scheme, which will deliver 350 new homes.
Knight Frank Investment Management has sold the Princes Mead shopping centre site in Farnborough to Sovereign Housing Association, on behalf of Local Pensions Partnership Investments.
The 7.77-acre site was bought for £17.6m, reflecting an 8% net initial yield.
KFIM said it has secured support from the local authority through the planning pre-application process for a major residential-led redevelopment scheme, which will deliver 350 new homes.
The investment manager added that Sovereign was selected from “a number” of interested parties on the basis of price, as well as its track record in providing affordable housing.
Under the deal, KFIM and LPPI will remain involved in the development project as overage partners.
The site links Farnborough’s town centre and its main retail warehouse and foodstore offering, including three core areas plus car parking:
The Princes Mead Shopping Centre, a covered shopping centre providing 96,131 sq ft of community and convenience-focused retail space, with tenants including Sports Direct, WH Smith, Boots, Subway, Costa, Burger King and JD Sports;
The Mead block, consisting of eight retail spaces totalling 20,698 sq ft;
Two recently-developed retail warehouses totalling 32,000 sq ft, let to Smyths Toys and Decathlon.
The site is at the heart of wider regeneration plans for Farnborough town centre, which are being brought forward by Rushmoor Borough Council and the Rushmoor Development Partnership. The “Civic Quarter” masterplan includes a new leisure centre, civic hub and park, 1,000 new energy-efficient homes, and new restaurant, food and beverage areas.
The redevelopment of Princes Mead is set to be delivered before the first phase of those plans complete.
John Styles, partner at KFIM, said: “We are confident that Sovereign will take the project forward maximising the benefits, particularly in terms of affordable housing provision for Farnborough.”
The deal marks Sovereign’s second shopping centre acquisition. Tom Titherington, chief investment and development officer at Sovereign, said: “As our high streets evolve, it becomes increasingly important for forward-thinking housing associations such as Sovereign to take a proactive role in regenerating our town centres, supporting our customers through the delivery of affordable homes and the successful re-imagination of our high streets.”
Adrian Peachey, partner at Montagu Evans, which advised KFIM on the deal, said: “As town centres evolve and new partnerships – both public and private – are necessary to deliver on these opportunities, dynamic new types of investors are stepping forward.
“This is a deliverable development opportunity with strong alternative use value, which is supported by the local authority and forms part of their wider town centre regeneration plans. Farnborough has an active and growing residential market, and this opportunity will help rebalance the town centre offer as well as meeting local housing demand.”
JLL acted for Sovereign.
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Image © KFIM/Holistic
