Hammerson has exchanged contracts to acquire The Victoria Quarter in Leeds for £136 million (approx. 170 million) from Kennedy Wilson on behalf of Bank of Ireland Private Banking.
The Victoria Quarter has successfully established itself as a leading luxury retail destination.
The deal reinforces Hammerson's presence both in Leeds, and in the fast-growing luxury retail sector. The acquisition complements Hammerson's proposals for the first phase of Eastgate Quarters, which is adjacent to the Victoria Quarter, enabling a coordinated approach to its tenant strategy and marketing in Leeds.
Anchored by Harvey Nichols, the Victoria Quarter has successfully established itself as a leading luxury retail destination in the heart of Leeds' retail core. Comprising 19,500 m² (210,000 ft²) with over 70 stores and two cafés, the listed arcades provide a unique retail environment in two distinct shopping streets:
County Arcade with 30 units is home to high end retailers such as Louis Vuitton, Mulberry, Vivienne Westwood and Oliver Sweeney.
Queen Victoria Street comprises 26 stores and the entrances to the Harvey Nichols department store. Additional retailers include Hobbs, Whistles, Kurt Geiger and Kiehls.
In addition, the scheme provides stores fronting Briggate, King Edward Street and Vicar Lane, with brands including Diesel, Jack Wills, LK Bennett and Paul Smith.
Victoria Quarter continues to experience strong demand from designer retail brands and is 100% let. Passing rent is currently £7.2 million (approx. 9 million) and after taking into account costs the initial yield on the purchase is 5.25%. Leeds has an affluent population and a prominent position as the principal shopping destination in Yorkshire. There is a significant opportunity to capture growing consumer demand throughout the region by bringing exciting new brands to the city.
David Atkins, Chief Executive of Hammerson commented: "Our purchase of the Victoria Quarter is a further demonstration of our commitment to Leeds, following the announcement of our plans for Eastgate Quarters in July.
"Victoria Quarter is a retail landmark in Leeds, and our ownership of the scheme will help us to develop a comprehensive retail offer for Eastgate Quarters and expand the luxury and aspirational retail offer for the city."
The 36,000 m² first phase of Hammerson's Eastgate Quarters scheme will be anchored by a 24,000 m² (260,000 ft²) John Lewis store and will create a direct route from the Victoria Quarter to the new retail stores. This will be accompanied by up to six restaurants, additional leisure space and a 600 space multi-story car park.
A detailed planning application for Eastgate Quarters will be submitted in Spring 2013 and work is anticipated to start on site in 2014 with the first phase complete in 2016.
Hammerson was advised on the transaction by DTZ, Strutt & Parker and Nabarro. Kennedy Wilson was advised by CBRE and Trowers & Hamlins