The flagship Silverburn shopping centre in Glasgow has been acquired by Henderson Park, a private equity firm headquartered in London, from a joint venture between retail property giant Hammerson and Canada Pension Plan Investment Board.
Silverburn was opened in 2007 and currently consists of 125 retail and leisure units including big names such as Next, Marks & Spencer and TK Maxx. The leisure extension, which was completed in 2015, added a 14-screen Cineworld and 11 restaurant units including Pizza Express, Five Guys and TGI Fridays.
The 100,000-square-metre centre sits on a 67-acre freehold site, which also includes 500 car parking spaces and the largest Tesco in Scotland, under a long lease.
The acquisition has been undertaken alongside Eurofund, who will act as Henderson Park’s operating partner.
What are the new owners saying?
Henderson Park noted: “Silverburn is a top 20 UK shopping centre located in Pollok, a wealthy suburb of the UK’s fifth largest city, Glasgow.
“As the city’s newest and highest quality shopping centre, Silverburn has a wide and affluent catchment area of circa 1.9 million people, 80 per cent of which are within a 21-minute drive.
“The centre also benefits from strong transport links, with a major bus terminal located on site, and has historically generated consistently high footfall of 15 million.”
Bosses noted that the centre is currently 78 per cent physically occupied and rent collection from the remaining tenants has been “strong”, standing at 92 per cent for the past quarter.
Christophe Kuhbier, managing director of Henderson Park, said: “Silverburn with its large catchment area close to one of the UK’s largest cities has limited direct competition and posted robust footfall levels and cash collection this year.
“With retail valuations under pressure in recent years, we have been monitoring the UK prime retail market and we see here an excellent opportunity to acquire this asset off-market and invest in a modern asset with immediate upside potential.
“Alongside our specialist operating partner Eurofund, our asset management plan aims at attracting new occupiers that focus on leisure, food and beverage and experiential retail sectors, completing the repositioning of the asset as a premier retail and leisure destination.
“We look forward to investing targeted capital expenditure to maximise the potential of this asset and delivering strong returns to our investors.”
Exceed its potential
Ian Sandford, chairman of Eurofund Group, added: “We are excited by this opportunity to unlock latent value from this exceptional top 20 UK shopping centre asset which has to date been underperforming.
“We aim to use our team’s asset management and operational expertise to bring the shopping resort concept and return Silverburn to the offering and performance levels the people of Glasgow deserve and to help it exceed its potential.
“Glasgow’s profile in the UK was highlighted recently as it was selected as the host city for climate change summit COP26. Furthermore, international brands have expanded their footprint in Scotland at Silverburn, most recently Tommy Hilfiger - demonstrating the attractiveness of the flagship destination globally.”
Vendor Hammerson’s other assets include Aberdeen’s Union Square centre.
This article first appeared in our sister title, The Scotsman.