Frasers Group has completed acquisition of Frenchgate Shopping Centre in Doncaster. CoStar News revealed the group was in talks to buy the centre in May.
Frasers said the 770,000-square-foot retail centre has over 16 million customers a year and the acquisitions demonstrates its commitment to growing its geographical positioning across the UK.
The shopping centre is a key part of the retail offer in Doncaster town centre and the South Yorkshire region, with high street tenants, including Next, H&M and TK Maxx. Frasers said the deal provides an opportunity to more than triple the Sports Direct store size to over 35,000 square feet and provide customers with access to other brands from Frasers Group including USC, Game and Evans Cycles.
Michael Murray, chief executive of the group said in a statement: “The acquisition of Frenchgate Shopping Centre in Doncaster further demonstrates the group’s commitment to investing into brick-and-mortar. Acquiring property in key trading locations to unlock new opportunities for our retail and leisure businesses”
Frasers Group was advised by CBRE. The private seller was advised by Savills.
The price was not disclosed but Savills had been acting on the sale of Frenchgate on behalf of a private investor seeking £35 million or a 10.5% net initial yield.
As an example of how values for leading shopping centres have fallen over the past two decades, the mall was sold in 2008 by Teesland and Equity Partnerships for £245 million, reflecting a net initial yield of 6.75%, to the Frenchgate Limited Partnership.
Anchor tenants include Sainsbury’s (39,750 square feet), Boots (35,361 square feet), and bargain department store Boyes (22,238 square feet). Frenchgate has a weighted average unexpired lease term to expiry of 11.19 years and weighted average unexpired lease term to break of 9.71 years.
Savills advises that the mall offers significant asset management opportunities and development potential, including the reletting of the former Debenhams department store.
Sports Direct tycoon Mike Ashley's Frasers has been increasingly busy buying retail assets rather than merely leasing for its own occupation.
Last year it bought The Mall shopping centre in Luton from Capital & Regional for £58 million and the Overgate Centre in Dundee for £30 million. It also bought Junction 32, an outlet shopping centre near Castleford, West Yorkshire, for £50 million.
Murray, the son-in-law of Mike Ashley, who is now the chief executive of Frasers, hails from Doncaster.