Three major shopping centre transactions totalling more than £400 million are progressing strongly as improved demand and limited stock drive a rebounding investment market.
CoStar News understands that the Strathclyde Pension Fund and Ediston Property have entered talks to buy the St Enoch Centre in Glasgow.
St Enoch Centre comprises 830,000 square feet of retail and leisure. It is asset-managed by CBRE's Sovereign Centros on behalf of a banking consortium that comprises Morgan Stanley and M&G and is anchored by tenants including Boots, Hamley's and HMV.
JLL is acting on the sale on behalf of the banking consortium with a price of around £65 million expected to be paid.
Separately, M&G Real Estate has agreed to pay just over £100 million to buy the 50% of the long leasehold it does not own in the 1-million-square-foot Cribbs Mall in Bristol from the lenders that securitised the mall and then took control of the stake when Intu fell into administration.
The mall is at the heart of Cribbs Causeway and home to more than 150 shops and restaurants. Anchor tenants include Boots, H&M, HMV, John Lewis, M&S and Next.
CBRE is advising M&G, while JLL is advising the Intu creditors. It is understood original developer JT Baylis retains around a third interest in the freehold.
The acquisition follows a well trodden path of joint venture partners of Intu at the time of its collapse moving to take full control of malls from the lending consortiums that were left with stakes.
In 2021 the Greater Manchester Pension Fund bought the remaining 50%, the former Intu Norwich Chapelfield shopping centre, while Cale Street took 100% ownership of Intu Derby. Last year Landsec took 100% ownership of St David’s shopping centre, Cardiff, after buying the debt secured against the 50% share previously owned by Intu.
Shopping centre group Intu collapsed into administration at the end of June 2020.
Major shopping centre investors and landlords including Hammerson and Landsec have more pursued strategies where they have looked to increase their ownership.
M&G has been working with Pradera Lateral as asset manager on behalf of the lending consortium at Cribbs Causeway, and will now look to push on with its own asset management priorities. React News first reported M&G's acquisition of the stake.
It is understood bids were called this week for Nuveen Real Estate's 25% interest in Edinburgh’s St James Quarter, the £1 billion retail and leisure complex completed in 2021, as well as a 100% interest in the W Edinburgh hotel at the scheme.
Savills is sole agent for the 25% interest, but has been jointly appointed with Eastdil Secured to sell the hotel. Dutch asset manager APG, which manages the Netherlands' civil service and education pension fund ABP, owns the remaining 75%. Market sources have said a number of the leading shopping centre investors in the UK have expressed interest.