Canadian pension fund CPP Investments has acquired the ownership of the UK’s third largest shopping centre, the Trafford Centre in Manchester, in its role as creditor to Intu Trafford Centre Group (ITCG), a subsidiary of collapsed UK retail specialist Intu Properties.
CPP’s Credit arm provided a £250 mln facility to the Intu subsidiary back in 2017. The facility was secured by the equity interest in the Trafford Centre.
The news follows the unsuccessful marketing of the Trafford Centre, which was put up for sale after the collapse of Intu Properties in June but failed to attract ‘viable bids’.
‘As the principal secured creditor of ITCG with security over the equity interest in the Trafford Centre, in the absence of alternative sources of funding and the unsuccessful sale process, CPPIB Credit has exercised its rights to acquire the shares in ITCG and the ownership of the Trafford Centre,’ CPP Investments said.
‘While conditions for retail in 2020 have been very challenging, we are able to take a long-term view and believe that, with strategic management and investment, the Trafford Centre has strong prospects. An immediate priority is to support the Trafford Centre’s management, ensuring continued optimal operation of the Trafford Centre, and to appoint a long-term expert operating partner,’ said Geoff Souter, managing director, head of Real Assets Credit, CPPIB Credit.
CPPIB Credit will also evaluate the Trafford Centre’s complex capital structure to ensure it supports the return to long-term viability.
CPP Investments is a well-established investor in UK shopping centres with specialist experience of owning large scale retail assets. It has a strong track record in U.K. retail with investments in London’s Westfield Stratford, Birmingham’s Bullring and Grand Central.
Manchester’s intu Trafford Centre is a 1.9-million-square-foot super-regional, prime shopping centre, housing more than 230 stores, as well as more than 65 catering and leisure units, across its four arcades and two floors.
The mall was Intu’s larges property asset before it collapsed last summer, with a value per end-2019 of £1.7 bn.
