Mall market stutters back to life
Two deals have revived hope in the UK shopping centre investment market after a year of low volumes.
Invesco has placed under offer a 50% stake in Southside shopping centre in Wandsworth, SW18, for around £150m while Abu Dhabi Investment Authority has bought Criterion Capital’s Queensmere and Observatory shopping centres in Slough, Berkshire, for £130m.
Capital & Regional is also the front runner to buy The Exchange shopping centre in Ilford, north London, from Meyer Bergman, which was out on the market in May this year with an asking price of £90m.
[caption id="attachment_867097" align="aligncenter" width="570"] Southside shopping centre, Wandsworth[/caption]
Two deals have revived hope in the UK shopping centre investment market after a year of low volumes.
Invesco has placed under offer a 50% stake in Southside shopping centre in Wandsworth, SW18, for around £150m while Abu Dhabi Investment Authority has bought Criterion Capital’s Queensmere and Observatory shopping centres in Slough, Berkshire, for £130m.
Capital & Regional is also the front runner to buy The Exchange shopping centre in Ilford, north London, from Meyer Bergman, which was out on the market in May this year with an asking price of £90m.
According to Cushman & Wakefield, only £1.5bn has been transacted in the sector so far this year – down by 53% on the same point last year and the lowest level since 2009.
Alan Lockhart, property director at regional shopping centre owner NewRiver, said: “Brexit caused uncertainty but with the new government established, more confidence has come into the wider capital and equity markets. “It is not surprising to see overseas investors gaining greater confidence as a result of more stability.”
Both sales offer strategic opportunities for the investors.
The sale of Wandsworth was stalled while Land Securities, which originally offered its stake alongside Delancey, reconsidered its position and decided to retain its management role at the mall. Invesco’s stake in the 630,000 sq ft shopping centre will form part of its European Direct Core Real Estate mandate. The mall sits opposite the Ram Brewery redevelopment, which is set to benefit the area.
ADIA is likely to benefit from infrastructure improvements in Slough, with Crossrail due to be open there from 2018. Nationwide research revealed that the Crossrail effect had pushed the average house price in Slough up by 60% from 2010, to £283,891.
The Queensmere mall has also consent for a 130,000 sq ft extension and 675 homes, although ADIA is likely to resubmit plans for a more ambitious scheme.
Catalyst Capital has been appointed as ADIA’s asset manager for the Slough malls.
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