SWIP and C&R in Redditch Mall Deal
Capital & Regional and Oaktree Capital Management have unconditionally exchanged contracts to purchase The Kingfisher Shopping Centre in Redditch from clients of Scottish Widows Investment Partnership.
The acquisition, which is expected to complete within 7 days, will be made through a new C&R / Oaktree joint venture vehicle formed specifically for this purpose. The acquisition is funded by investments from C&R and Oaktree, representing equity shares of 20% and 80% respectively. The remaining funding will be provided by The Royal Bank of Scotland and Santander.
The price paid for the centre is approximately £130 million, representing a net initial yield of circa 8%. The centre is a dominant sub regional mall, occupying a 27 acre site and extends to approx. 1 million sq ft of retail accommodation. This is supported by 2,800 car parking spaces, an integrated bus station and an adjacent rail station. Anchor retailers include Debenhams, M&S, Primark, Next, Arcadia and TK Maxx. An Apollo multi-screen cinema provides a leisure focus.
SWIP were advised jointly by Cushman & Wakefield and Jackson Criss. Strutt & Parker advised C&R and Oaktree.
Charlie Barke, Head of Town Centre Retail Investment at C&W said:
"The SWIP funds have owned the scheme since 2004 and have successfully brought a number of new retailers to the centre during their ownership, including: Burtons, Dorothy Perkins, Barclays, JD and Apollo Cinemas. The funds will now be looking to reinvest the capital into smaller assets, where each fund can gain 100% ownership. Whilst the occupational markets remain challenging, we are still seeing good investment demand for shopping centres and it is encouraging to see that debt supported buyers are still able to execute transactions in excess of £100m where the right boxes are ticked".
Gavin Hendry, Retail Investment Partner at Strutt & Parker added:
"Redditch is a strategic asset, which benefits from strong core attributes but offers very real potential to further enhance the retail and leisure offer through identifiable asset management initiatives".