A joint venture of Eurofund and Henderson Park has completed the purchase of the Silverburn shopping centre in Glasgow for a 9.3% yield.
The deal to acquire the 100,000 m2 flagship centre is an off-market transaction from Hammerson and Canada Pension Plan Investment Board for £140 mln (€167 mln). Eurofund Group is the operating partner in the JV and has also co-invested alongside Henderson Park.
Located in Pollok, a wealthy suburb of the UK’s fifth largest city, Silverburn is Glasgow’s newest and highest quality shopping centre with an affluent catchment area of 2.1m people. The centre, which first opened in 2007, consists of 125 grocery, retail and leisure units with brands such as Next, Marks & Spencer and TK Maxx.
The centre also welcomed a leisure extension in 2015, which added a 14-screen Cineworld and 11 restaurants including Pizza Express, Five Guys and TGI Fridays. The shopping centre sits on a 67-acre freehold site, which includes 4,500 car parking spaces and the largest Tesco in Scotland, under a long leasehold interest.
Ian Sandford, president, commented: ‘We are pleased to have had to opportunity to co-invest in Silverburn along with our JV partners at Henderson Park. Silverburn represents a fantastic opportunity to take a good centre and transform it into the leading asset in its catchment. Eurofund’s vision is to utilise our team’s strong asset management and operational expertise to unlock latent value and reposition Silverburn as the leading retail, leisure and F&B destination in Scotland.’
Alberto Esguevillas, Chief Executive Officer UK, added: ‘Scotland represents a particularly strong retail opportunity in the UK, with Glasgow recently being named one of the two most resilient retail destinations in the country. This is demonstrated in the strong interest we are seeing from retailers and brands wanting to expand or establish a presence in Silverburn.’
The joint venture was advised on this transaction by BCLP, Brodies, Alvarez & Marsal and Time Retail Partners.
Hammerson and CPPIB bought the asset back in 2009 on a 50-50 basis for £297 mln (€334 mln). The gross rental income at the time was £18.4 mln, representing an initial yield of around 6%.
