Invesco Real Estate (IRE) has agreed to pay £150 mln (€178 mln) for a 50% stake in Southside Shopping Centre in Wandsworth, one of the largest retail destinations in London.
The transaction, on behalf of IRE's pan-European core strategy, involves replacing Delancey's DV4 fund in the 50/50 joint venture with UK REIT Land Securities that owns the 58500 m2 Southside Shopping Centre in south west London.
The 92-store centre is split into three indoor malls, plus a street-frontage along Garratt Lane. Land Securities has taken over the asset management of Southside on behalf of its new joint venture with IRE.
IRE described the acquisition as a rare opportunity to acquire one of London’s most dominant shopping centres with a diversified tenant mix in a growing and improving catchment.
Rob Johnston, senior director of transactions at IRE, said: 'IRE has been looking to increase its allocation to shopping centres across Europe and the purchase of Southside is a vote of confidence in both the resilience of the UK retail market and overall UK consumer spending. The asset is well positioned as a dominant scheme in its catchment and is forecast to provide solid income and net operating income growth through active asset management. We are looking forward to working with Land Securities on improving the asset.'
The sale transaction enables Land Securities and Delancey, a London-based real estate specialist firm, to exit from the Metro Shopping Fund. As part of the exit, Land Securities also sold its 50% stake in ShopStop, a 6,500 m2 mixed-use scheme at the entrance to Clapham Junction station to DV4.
The third-party debt in the Metro Shopping Fund has now been repaid.
'Since establishing the Metro Shopping Fund 13 years ago, we have enjoyed a successful longstanding partnership with Land Securities, which has been responsible for significant developments at the Southside Shopping Centre scheme,' said Tim Haden-Scott, investment director at Delancey. 'Southside has proven to be an excellent asset, however now our business plan has come to an end with the completion of the Garratt Lane development, we will refocus activity to assume full asset management responsibility for ShopStop, Clapham Junction – an asset which was also formerly held within the Metro portfolio.'
Knight Frank advised IRE and Lunson Mitchenall advised Delancey in the Southside transaction.
