The Alhambra Shopping Centre in the Yorkshire town of Barnsley has just been sold
to commercial property investor and real estate giant F&C REIT as part of a multi-million pound deal.
The Barnsley Alhambra is a 180,000 sq ft commercial property in the centre of Barnsley. It is the only covered shopping centre in Barnsley and houses 41 tenants, including TK Maxx, Next and Primark. It opened in 1991 and was run as part of the Capital and Regional’s Mall Fund along with Aviva Investors.
The sale of the commercial property in Barnsley, along with Middlesbrough’s Cleveland Centre, is part of a deal that has netted £108.1 million for Capital and Regional. The company has indicated that the proceeds of the sale will be used to reduce the company’s debts and allow it to focus on its core commercial property needs.
Hugh Scott-Barrett, Capital and Regional chief executive, said: ‘In challenging markets it is particularly pleasing to achieve the sale of these assets at a good price. The sales take the Mall a significant step towards the December 2014 debt target of £600m and the goal of recommencing distributions from the fund.’
‘Following completion of this transaction the Mall’s outstanding debt will amount to around 665 million pounds, a reduction since December 2009 of 580 million pounds,’ the company added.
Capital and Regional have said that the sale reflects a net initial yield of 8.6% but is slightly below the June 2011 valuation for the commercial property. The company has a stake of 16.7% in the Mall Fund, which it runs with Aviva Investors. Before the sale of the Barnsley Alhambra and the Cleveland Centre, the Mall Fund owned and managed eleven commercial property sites throughout Britain, which featured more than 1,400 retail units, covered 6 million sq ft and attracted almost two and a half million shoppers every week.
Together the fund also has interests in the group of Junction retail park, from which they have made commercial property disposals in order to further reduce their debts.
F&C REIT is a truly global company with a commercial property portfolio worth in excess of £7.8bn, but in this deal they have partnered with three other organisations, one of which being an existing client – ESAS Holdings – A Turkish private equity firm
Zvi Noe, Director of Investments at F&C REIT, said of the Barnsley and Middlesbrough purchases: ‘They offer a blend of strong running income and value-enhancing asset management initiatives which is attractive to our clients, and which offers excellent risk-adjusted, value-creation opportunities. The deal demonstrates our ability to source value-add opportunistic stock and structure deals attractively for a wide range of underlying investors.’
No doubt, as there are still debts to reduce, this will not be the end of the commercial property sell-off for Capital and Regional’s Mall Fund.
