The Scottish Retail Property Limited Partnership (SRPLP/ the âPartnershipâ), the joint venture between The British Land Company PLC and Land Securities Group PLC, has concluded the purchase of Princes Square and Southgate in East Kilbride Shopping Center for over Â£60 million, creating one of the largest shopping centers in the UK and the largest in Scotland.
Princes Square was purchased from Prudential at a net price of Â£37.25 million, showing an equivalent yield of around 6%. Built in 1997, the center comprises 34 units, totalling 8,154 sq m (87,769 sq ft) with New Look and Sport Soccer as anchors.
Also prime Zone A space on one level, Southgate extends to 4,259 sq m (45,843 sq ft) with 14 units, including a popular Carlton Club bingo hall. The Partnershipâs bid of Â£24.50 million for the space, formerly owned by Scottish Mutual Assurance plc, was accepted over two other offers, and will bring a net initial yield of 5.18%.
In total, the new assets acquired by the Partnership currently produce a gross income of approximately Â£3.7 million per annum from almost 50 retail and leisure outlets.
On behalf of The Partnership, John Wilson comments: âFirst and foremost, these acquisitions show long-term commitment to developing our already successful retail pitch in East Kilbride. With the town facing increased competition from neighbouring retail developments, this gives us the opportunity to create new standards in the retail offer to benefit both retailers and consumers. We are now better placed to create synergy between the malls, adding to a more enjoyable shopping environment.
âIn particular, we aim to meet the changing needs of retailers. Over recent months, demand has been increasing for larger space â" usually 3,000 to 5,000 sq ft â" and both Princes Square and Southgate present a variety of opportunities for reconfiguration to improve unit sizes. This is likely to generate more interest from high street retail giants and attract new flagship retailers keen to secure their first outlet in Scotland â" as was the case with Esprit.â
Merrick Marshall of The Partnership added: âIt made good strategic sense to acquire the retail assets in East Kilbride adjoining existing Partnership holdings. Through one ownership, we can take this once-in-a-generation opportunity to unlock the real, sustainable potential of East Kilbride as the dominant retail centre for south Glasgow. It will also provide benefits of scale for the management of the centre, as well as an opportunity to improve circulation and secure more unified control of the malls.
âThere is no doubt that a co-ordinated asset management and tenant mix strategy will strengthen the entire town and make it more attractive to a wider catchment.â
The Partnership owns the remainder of the 1.2 million sq ft East Kilbride Shopping Centre: comprising Centre West; Plaza Centre; Princes Mall; and Olympia. Moreover, the joint venture is working closely with Strathclyde Passenger Transport on the Â£4 million regeneration of the bus station, the completion of which is scheduled for early 2005.
Donaldsons acted for SRPLP, Prudential Property Investment Managers Ltd represented Prudential, and Abbey National Asset Managers and Montagu Evans represented Scottish Mutual Assurance plc.
Source: Land Securities