Ingka Centres, part of Ikea, is about to close its acquisition of Churchill Square shopping centre in Brighton for approximately £145 mln, some £30 mln below the price mooted earlier this year.
The sum accepted by vendor abrdn reflects a net initial yield of about 11% which one market participant said illustrates where prices of good UK shopping centres need to be in order to transact.
The sale of the prime, freehold 520,000 ft2 shopping centre in the centre of Brighton is expected to close imminently.
Abrdn’s Aberdeen Standard Property Unit Trust mandated Knight Frank to put the centre up for sale in 2022, initially seeking £250 mln. Ingka was reported to be in negotiations to buy it for £175 mln, a 9% yield, earlier this year.
Transactions are taking a long time to conclude in the current market, not least because there are relatively few buyers and pricing is hard to ascertain.
Churchill Square is expected to be adapted by Ingka Centres to the company’s ‘urban meeting places’ concept which it has recently begun been rolling out in cities and which incorporate Ikea stores of varying sizes.
The first to open was Kings Mall in London’s Hammersmith which Ingka bought in 2020.
The Swedish group bought again in London, picking up the former Top Shop megastore in the West End on Oxford Street for redevelopment.
And in April this year Ingka announced it had bought Italie Deux shopping centre in Paris, together with its high street extension ItaliK and neighbouring office complex Apollo. The adjoining Paris assets will be united into Ingka’s first urban meeting place in France.
In August, Ingka said it would invest €170 mln in a major expansion of its Kungen Kurva shopping centre in Stockholm with the aim of transforming it into an urban meeting place ‘for all things food, fashion, leisure and play’ and with a direct link to the Ikea store on site.
There are a historically high number of interests in very large, prime shopping centres in the UK and Ireland which have gone up for sale in the last six months: Meadowhall near Sheffield; Liverpool One; Centre:MK in Milton Keynes; and Blanchardstown in Dublin.
