Retail acquisitions have risen hugely in recent months as developers seek to cash in on the improving consumer climate, with a number of high profile deals being completed in regional areas throughout the UK. This week, London based property firm Clearbell Capital has confirmed its purchase of The Gates shopping centre in Durham in a deal worth almost £12 million.
Once known as the Millburngate Shopping Centre, the 130,000 square foot development has been a part of Durham’s retail landscape since the 1980s but has struggled to attract consumers in recent years. Part of the reasoning behind this is the large number of out of town retail parks which have opened in the vicinity, along with rival city centre complexes, such as The Prince Bishops Shopping Centre and Walkergate leisure development, but the recession proved to be the straw that broke the camel’s back – forcing the centre into administration in 2012.
Problems first arose when The Gates’ anchor, a flagship Waitrose store, chose not to renew its lease in 2008. This left the centre’s largest unit empty until it was eventually filled by discounter Wilkinsons.
The new owners are determined to turn around the fortunes of the struggling shopping centre and intend to invest significantly into redeveloping the site, adding to the initial £11.85 million purchase cost. While no plans have yet been submitted to the local authority for consideration, it is believed that Clearbell Capital wishes to create around 30,000 square feet of restaurant space to diversify the centre’s offering, along with constructing accommodation units capable of housing around 300 students from the local university.
In addition, they hope to attract the interest of cinema operators by introducing Durham’s largest multi-screen cinema facility to the scheme. At present, the city has only a council run Gala Theatre, with the only rival, a privately owned screen, having closed in 2003.
Clearbell Capital partner Nick Berry believes the firm’s investment could prove hugely profitable in the coming years, both for the owner and for the local area.
He says; “The Gates is very well located and we see plenty of scope to enhance the shopping centre as it stands.
“We also think there is substantially more we can do to improve the offering to the local area, with new riverside restaurants and a cinema complex.”
Although the shopping centre has undoubtedly faced its fair share of problems in recent years, Clearbell Capital will certainly not struggle to attract consumers. At present, the current footfall level stands at an average of 3.5 million visitors per year, largely due to the proximity of the North Road bus station.
With shop units for 49 retailers and car parking facilities with 473 spaces already in existence, Clearbell Capital may indeed have gotten a bargain for the £11.85 million price tag. However, with further investment into the leisure offering, the firm may find The Gates has the potential to be one of the best buys it has ever made.
Do you think The Gates’ greatest issue at present is the lack of space for leisure tenants?
