UK - A joint venture between Strathclyde's £11.2bn (€12.7bn) local authority pension scheme and Legal & General Property (LGP) has scaled down previously ambitious expansion plans for the Arndale Centre, a retail asset in East Sussex.
Expansion plans mooted by the partners for the Arndale Centre before the financial crisis were put on hold because of the market downturn. The current £65m expansion will be on a significantly smaller scale.
Simon Russian, senior fund manager of retail development at LGP explained the changes were motivated solely by market conditions.
He said: "The expansion was originally planned in a different way and on a different scale but for reasons mostly to do with the market it didn't happen at that time."
"This is a much more modest proposal to add 16—20 units within a much shorter timescale."
The centre's new west wing is expected to open in 2015. Asked about the likely return on investment, Russian cited valuation confidentiality, but he did not rule out further future refurbishment of the centre.
"There are other things we could do to the asset. There could be further extensions outside the current scheme, or we could shuffle around retailers to give them the space they want," he said.
The centre is one of two assets held within the Performance Retail Limited Partnership, one of four single-asset vehicles managed by our LGP. It was set up in 2002 nominally to acquire shopping centres.
Russian today declined to identify a second asset held by the partnership, but he confirmed the partners had no plans to acquire additional assets.
