Dutch pension asset manager APG has acquired a 75% stake in the St James shopping centre in Edinburgh from TH Real Estate ahead of a major redevelopment of the complex.
The £1 bn redevelopment will now commence with immediate effect, the two partners said in a joint press release. TH Real Estate's UK Shopping Centre Fund will retain a 25% holding in the 1.7 million sq ft (158,000 m2) retail and leisure centre whose redevelopment will transform the city centre of Edinburgh.
TH Real Estate will continue its role as development and asset manager of the project, which will be one of the UK's largest private sector regeneration projects and which represents one of the largest inward investments for Scotland this year.
Commenting on the deal, Robert-Jan Foortse, Head of European Property Investments at APG , said: 'The Edinburgh St James project is one the UK's largest and most significant regeneration projects. We are excited to become part of this scheme that will transform and reinforce the heart of Edinburgh city centre with the creation of a new shopping destination. Furthermore we believe that the addition of the W hotel will help attract even more tourists to this Unesco World Heritage city.'
APG already has an extensive portfolio of major European shopping centres including Westfield Stratford City in London and CAP3000 in Nice, he added. 'Edinburgh St James also fits in seamlessly with our strategy to increase our focus on "develop to core" projects. In TH Real Estate we have a long-time trusted partner and we look forward to working with them in the completion of the project and its management, once it has been completed.'
Multi-screen cinema and hotel
Edinburgh St James will comprise 850,000 sq ft of retail space, anchored by John Lewis, a multi-screen cinema and a world class W Hotel, which represents their debut in Scotland, comprising 214 rooms. In addition, 150 private apartments, offering breath-taking views over the City, set a gold standard for prime residential accommodation.
Laing O'Rourke, which had been appointed on a consultancy basis to advise on pre-construction works over the last year, has now been appointed as the main contractor for the project, for which the retail and leisure element is anticipated to complete in 2020, followed by full scheme completion in 2021.
The commencement of the construction phase will begin with the demolition of the existing St James Shopping centre. The mall, which was constructed in the 1960s, has now closed its doors for the final time after over 40 years of trading, although John Lewis, which will anchor the Edinburgh St James scheme, will continue to trade throughout the construction process.
Work began onsite this week, with demolition anticipated to take around 18 months to complete.
TH Real Estate, an operating division of TIAA Global Asset Management, is one of the largest real estate investment managers in the world with $97 bn in AUM. The company manages a suite of nearly 80 funds and mandates spanning both debt and equity across diverse geographies, sectors, investment styles and vehicle types.
APG Asset Management is the largest pension fund asset manager in the Netherlands, acting on behalf of 4.5 million active and retired participants from the public and private sectors. Overall, APG Asset Management manages pension assets of more than €440 bn as at end-August.
