A lack of available city centre sites in Birmingham has spurred Primark to spend £60m on acquiring space to house its largest store in the UK.
The budget retailer is now close to completing the deal to buy the 250,000 sq ft Pavilions shopping mall – which sits next to the iconic Bullring shopping centre – from UBS Triton Property Fund.
The deal is seen as a “one off” for the chain, rather than the start of a trend. How much space Primark will occupy itself has n0t been confirmed, but it is understood that it will take 200,000 sq ft and sublet the remaining 50,000 sq ft to other retail tenants.
Andy Benson, director at Birmingham-based retail agent Wright Silverwood, said: “This demonstrates the lack of large department store style footprints available. Primark had a very pressing requirement to upscale so it was opportunistic on this occasion. It was the only avenue available to it.”
Waheed Nazir, director of planning and regeneration at Birmingham city council, confirmed the council and Primark have been in talks about the project. He added: “This is a one off opportunity at the Pavilions with the onset of HS2.”
The Pavilions is included in the Birmingham Curzon masterplan, which is the council’s response to housing the HS2 terminus at neighbouring Eastside.
Does this acquisition by Primark point to a growing trend for retailers to acquire property outside of London? Benson thinks not. “I think this will only happen when there are no other options available to retailers.”
BWD’s Guy Webber added: “This is definitely not a trend. You just don’t find 200,000 sq ft stores readily available in a city centre.”
Indeed, ploughing money into bricks and mortar tends to go against the grain in the competitive world of retail. But for cash-rich Primark £60m will be easier to swallow, especially as the purchase price is at a distinct discount to the £98m price tag UBS paid for it back in 2004.
UBS is believed to have concluded talks with the existing retailers of the mall, including Laura Ashley and LK Bennett, to surrender their leases.
Savills and Kitchen La Frenais Morgan are advising the UBS Triton Property Fund.
lisa.pilkington@estatesgazette.com
