Scottish Widows to duck out of

Scottish Widows Investment Partnership is reportedly set to withdraw from an agreement to forward fund P&O Developments’ £200m Drake Circus shopping centre in Plymouth.

It emerged last week that Scottish Widows was thinking about pulling out of the scheme and that P&O’s advisers were considering resuming talks with a replacement buyer. The deal would have given Scottish Widows ownership of the centre on completion.

The redeveloped Drake Circus will comprise 654,450 sq ft of retail space and will be the largest shopping centre in the South West. The scheme will be anchored by two 120,000 sq ft department stores, already pre-let to Marks & Spencer and Allders.

The scheme was awarded planning consent in July 2003 and is expected to make around £12m a year in rent. Drake Circus is currently under construction and is expected to open in autumn 2006.

David Erwin, Head of Retail at Cushman & Wakefield, confirmed that talks were breaking down. “They are not completely dead, but it is a possibility that we may be reopening discussions with other parties', he said. 'I am confident we will soon secure a funding partner given the shopping centre market and, more significantly, the very positive interest in Drake Circus.”

Lunson Mitchenall and Chesterton are advising P&O. Scottish Widows declined to comment.
Source: Freeman

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