Acquisition of The Exchange Centre, Ilford
Capital & Regional has announced it has unconditionally exchanged contracts for the acquisition of The Exchange Centre, Ilford from a Meyer Bergman fund for £78 million, reflecting a Net Initial Yield of 6.70%. The purchase is in line with the C&R's strategy of selectively acquiring dominant local shopping centres that provide the opportunity of accelerating income and capital growth by utilising Capital & Regional's asset management platform and expertise.
The acquisition, which comprises the purchase of a holding company that owns the property, will be funded from the Group's existing cash resources, including recycling the proceeds from the recent successful disposals of The Mall Camberley and the Group's Buttermarket Centre, Ipswich joint venture, as well as through a new seven year debt facility of £39 million, secured on the asset, with DekaBank Deutsche Girozentrale. The total final consideration will involve a small adjustment for working capital amounts to be agreed shortly after completion.
The Exchange Centre is located opposite Ilford train station which will be rebuilt ahead of the opening of Crossrail, which is planned for 2019. It has three trading levels with 77 units providing 300,000 sq ft of lettable space and a multi-storey car park with over 1,000 spaces. The scheme is anchored by Debenhams and Marks & Spencer with other retailers including H&M, Next, River Island, Sports Direct, TK Maxx and Wilko.
The acquisition is expected to complete by 9 March 2017.
Ken Ford, Capital & Regional’s Executive Director, said: “The Exchange is a centre we know well having previously been owned within our Mall Fund. We are excited at the significant opportunities to establish The Exchange at the heart of a regenerated vibrant town centre by introducing new leisure operators alongside new homes.
The new Crossrail station opening in 2019 will also assist in underpinning the strong growth potential we see in the retail offer and we look forward to working with the council, the community and other stakeholders to bring forward our exciting plans.”
Hugh Scott-Barrett, Chief Executive commented: "The acquisition of the Exchange Centre, Ilford provides us with an opportunity to redeploy quickly the capital released from our two recent successful disposals into an investment which offers strong income and capital growth prospects and dominates the retail offer in a large and growing cosmopolitan East London town.
The Exchange is a centre we know well having previously been owned within The Mall. We see significant opportunities for leisure and residential development supported by an ambitious local authority, that is keen to facilitate investment in the area and the new Crossrail link, which is expected to open in 2019."