European Property Investors Special Opportunities 4 (EPISO 4), an opportunity fund advised by pan-European real estate investment manager Tristan Capital Partners, has agreed to invest in the €58m (£50m) redevelopment of the former Derrys department store in the city centre of Plymouth, southwest England. The investment will be in partnership with Thames Bank Property, which has been working on the project for more than three years.
The Plymouth Cross project, which received full planning consent in August 2016, involves remodelling, extending and refurbishing the building to create c.75,000ft² of retail/leisure space, a 500-bed student accommodation block and a hotel with 110 beds. Demolition work is to start immediately on part of the building, although the triple-sided retail/leisure frontage will be retained and refurbished.
Peter Mather, Managing Director for Investments at Tristan Capital, said: “Plymouth Cross will revitalise this part of the city centre by bringing new uses to this local landmark and providing much-needed quality student accommodation. A pre-let agreement is in place for the hotel and a student operator has signed up to directly let the student accommodation. There is strong interest for the new retail / leisure units from high street brands. This gives us great confidence about prospects for the project.”
Premier Inn, Britain’s largest hotel chain, has agreed a 25-year lease for accommodation on the building’s upper floors, while Homes for Students has signed a long-term agreement to operate the accommodation block that is scheduled to open in time for the start of the 2018-2019 academic year. Existing tenants occupying the ground-floor retail units include Argos and stationery chain Ryman.
Colin Morris, Managing Director of Thames Bank Property, said: "The investment from EPISO 4 allows us to start work in delivering a truly complementary mixed-use development with balanced income streams. I am delighted that Premier Inn has chosen Derrys for their central Plymouth hotel and their commitment for 110 hotel rooms and the ‘Thyme’ restaurant means that approximately half of the retail / leisure space is let or pre-let. I am confident that the redevelopment of Derrys will contribute significantly to the regeneration of the west end of Plymouth."
Plymouth is the dominant retail destination for south Devon and Cornwall, counties that attract high volumes of summertime tourist traffic. Plymouth has one of the UK’s largest universities, with a student body of more than 20,000 for whom there is a shortage of purpose-built accommodation. The city has a strong maritime heritage and as Western Europe’s largest naval base, Plymouth is a major centre for marine science and technology.
The former Derrys department store was originally founded in 1894 but was nearly entirely demolished on the first night of the Plymouth Blitz in 1941. It reopened in 1953 and was rebranded ‘Derrys Department Store’ in 1998 following a major refurbishment project. The property fronts onto New George Street, which is Plymouth’s main shopping street, and stands opposite the Theatre Royal. Plymouth University and the city’s other higher education institutes are within close walking distance, as is the Drake Circus Shopping Centre.
Advising EPISO 4 fund was BLP. Thames Bank was advised by CFK, NewLawsLegal, Mischon de Reya and Capra Global Partners.
