Cosgrave Property Group is preparing to put the Liberty Centre in Romford up for sale with an asking price in excess of £250m – a circa 5.25% yield.
The Irish property development firm has owned the 500,000 sq ft Essex scheme for more than a decade. It is set to formally put the assets up for sale in the coming weeks through Cushman & Wakefield and CBRE, which are jointly advising on the process.
This will be Cosgrave’s last sale in the UK, as it looks to redeploy its resources into the Dublin residential market.
The Liberty Centre is only 300 metres from the new Crossrail station in Romford, which is due to be operational in 2019. The shopping centre has an annual footfall of around 20m visitors per annum and comprises more than 100 shops. Tenants include River Island, H&M, Next, Topshop and Debenhams.
It sits on a 15-acre site and includes the opportunity to improve the retail offer with the space to accommodate growing food and beverage requirements. There is also an adjoining site included in the sale that has capacity to develop in excess of 1,000 flats, which could provide a mix of build-to-rent and units for sale.
The asset is expected to attract interest from both overseas and domestic investors with an appetite for large-scale residential and regeneration in the South East.
Cosgrave bought the shopping centre from Hammerson in 2006 alongside the adjacent Littlewoods site for £281m. In 2014, the debt secured against the centre formed part of a €370m debt portfolio made up of Cosgrave loans named Project Button, which was sold by Royal Bank of Scotland’s Irish arm Ulster Bank. The portfolio was bought by private equity firm Davidson Kempner but the following year Cosgrave refinanced Liberty with a five-year £153m senior loan from M&G Investments.
Liberty was originally developed by Hammerson and Standard Life in 1968. In 1999, Hammerson bought out Standard Life’s 50% interest in the centre. The Liberty Centre subsequently underwent a £54m refurbishment by Hammerson in 2003.
The sales process will be a litmus test for the shopping centre investment market, which has dragged so far this year as a result of investor hesitancy prompted by concerns over the retail sector. In the first quarter of this year shopping centre transactions equated to just £358m in seven deals. This reflects a 56% decrease compared with the £810m which transacted in the same period last year and a 58% decrease on the £845m which transacted in 14 deals in Q1 2015, according to Savills.
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