Investors are being sought for up to £200m to buy into the development of Hackney Walk, a 900,000 sq ft retail scheme billed as London’s answer to Bicester Village.
GM Real Estate has been appointed by Jacob Loftus’s General Projects, which is to be the development manager of the project.
A new discount fashion district on Morning Lane, E9, is to be delivered on a 3.5-acre site currently occupied by a Tesco superstore.
General Projects has an option over the site, which was purchased earlier this year from Tesco by Hackney Borough Council.
Plans contain buildings of five to 15 storeys, with 346,000 sq ft of retail and leisure, 259,000 sq ft of offices, and 211,000 sq ft of residential property.
Tesco will remain on site in a new supermarket and its existing store will remain open until a new, smaller one is ready.
The initial acquisition of the council’s site will be £150m-£200m.
The opportunity is understood to have attracted interest from a number of prospective institutional funders. The overall development value could be up to £1bn, with around £500m needed to fund the build-out.
The Hackney Walk scheme, which was conceived in 2011, aims to become the world’s first “urban” luxury outlet and has already attracted big-name brands in the first phase, which was delivered last year by Harry Handelsman’s Manhattan Loft Corporation, in collaboration with architect Adjaye Associates.
Handelsman then sold his shares in the development to ICG Longbow.
That phase comprises 40,000 sq ft of retail, let to brands including Aquascutum, Ugg, Nike and Pringle.
Elements of this would be redeveloped as part of the much larger second phase, which is expected to be delivered in full by 2023.
The project is hoping to replicate the success of Value Retail’s hugely popular Bicester Village outlet centre in Oxfordshire, which offers discount deals on luxury goods.
It is the UK’s second-most popular destination among Chinese tourists – after Buckingham Palace – and hosts brands such as Prada, Céline, Balenciaga and Saint Laurent, and attracts 6.3 million people a year.
Previously, the partners in the Hackney Walk scheme provoked local controversy because they sought to bring food and beverage retailers on to the site in order to improve footfall and dwell times that was considered a threat by operators in the area.
The inclusion of food and beverage was not originally proposed in 2012, when the council put £1.5m into the fashion hub project from the mayor’s post-riot fund.
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