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One of the largest real estate investment companies has just made an enormous £184-million investment to expand its portfolio. This investment was primarily retail focused with a 300,000-square-foot shopping centre in Ealing Broadway being purchased from Wereldhave for £142.5 million.
The Dutch real estate investment company, Wereldhave, originally purchased the Ealing Broadway mall in 2011, yet it is thought the sale to British Land was at a loss of £13 million.
British Land believes that this shopping centre has the potential for serious growth with an estimated 15 million people visiting per annum. This is due to the inevitable benefits arising from the completion of both Crossrail and a series of residential developments nearby. As there is a relatively high visitor turnover and a series of major tenants which include Tesco, Marks & Spencer and Primark, British Land remains confident despite Wereldhave being prepared to accept a £13 million loss. The mall has been purchased with a net initial yield of 6.9%.
Many would still consider this to be a relatively high-risk investment as many shopping centre investments have failed; so many shoppers in London now prefer the larger Westfield malls which have the greatest variety. In the case of Ealing Broadway, the dependence on the surrounding residential developments for a consistently high level of visitor numbers will be a significant factor as to whether this is the right investment.
The rest of British Land’s investment deal included a selection of properties along Fulham Road, Baker Street and Chiswick High Road. This is all part of a scheme to broaden its portfolio, now worth £10.4 billion. In September 2012 British Land made the decision to sell supermarkets in its portfolio to the value of £120 million, thus allowing the new investment programme to start, estimated at a total of £2 billion.
Morgan Pryce is a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.