Hammerson plc (Hammerson) has exchanged contracts with Birmingham City Council to acquire the new Grand Central shopping centre in Birmingham for £335m (€441m). Hammerson is in advanced discussions with an existing joint venture partner on other assets about entering into a 50:50 JV for the future ownership of Grand Central.
Grand Central, which opened in September 2015, provides 435,000ft² (40,400m²) of high-quality prime retail space, anchored by a 250,000ft² (23,200m²) John Lewis department store. It was developed by Network Rail and Birmingham City Council as part of the £750m (€988m) New Street Station regeneration project. Hammerson has acquired a 150 year headlease on the centre and the freeholder is Network Rail.
The centre provides an attractive retail setting for 40 premium stores including Monsoon, Fat Face, Hobbs, The White Company, Cath Kidston, Joules, Kiehls, Jo Malone, L’Occitane and MAC. There are over a dozen pop-up units on short term leases as well as an additional income stream from the ‘Eyes’ – large digital advertising screens on the exterior of the scheme.
The centre sits above redeveloped New Street Station which with Grand Central now makes up the busiest train station outside of London, expected to see footfall of over 55 million passengers per year. A new car park at the centre adds over 400 car park spaces to the existing 11,000 provided within central Birmingham.
The centre has demonstrated strong performance since opening, attracting average footfall of 62,000 per day in its first three months of trading with up to 105,000 per day over the Christmas period.
David Atkins, CEO of Hammerson, said: “The acquisition of Grand Central, a highly-prized trophy asset in the UK’s second city, is fully aligned with Hammerson’s strategy of owning top-performing retail destinations in prime locations, as demonstrated by our recent transactions in Ireland and growing exposure to European Premium Outlets. By deploying our expertise from Bullring, as well as other shopping centres around the UK, Hammerson is well placed to further enhance the consumer offer in Birmingham and achieve high returns through skilful management of Grand Central. We are strong supporters of the future of Birmingham and this acquisition provides us with additional exposure to the city’s fast growing economy.”
Councillor John Clancy, Leader of Birmingham City Council, said: “Hammerson has been a long-standing partner in Birmingham and we are delighted they share our vision for the city. With the addition of John Lewis anchored Grand Central, Birmingham has become the only UK city outside of London boasting the ‘big six’ leading department stores, reinforcing our position as one of the leading national retail destinations.”
Hammerson was advised by CBRE and Birmingham City Council was advised by Cushman & Wakefield.
