The owner of Manchester’s biggest and most well-known shopping centre has launched an ambitious five-year programme to increase turnover at the mall to more than £1bn.
Performance of the 1.9m sq ft Trafford Centre, which has been owned by the Canada Pension Plan Investment Board since the collapse of intu in 2020, tells the tale of retail over the past several years, with income and values falling significantly.
However, investors in the centre, which is managed by Padera Lateral with Savills as property manager, will later this week be walked through a new plan to revive the fortunes of the mall and bring revenue across the centre to more than £1bn.
There is a long way to go, however, with new figures for the Trafford Centre showing revenue in the first half of 2024 reaching £48.9m. This compares with £94.1m for full-year 2023 and a turnover of £108m in pre-Covid 2018.
The plans to boost revenue include finding and delivering “value-accretive” development projects, securing “all global powerhouse brands” within the mall by 2026 and creating a leisure offer that includes an outdoor events programme for major concerts, events and global product launches.
Plans to redevelop the main entrance petrol station and replace it with a Starbucks, EV showroom and EV chargers is progressing, while feasibility studies are under way to activate woodland around the mall to create a new visitor attraction.
Footfall at the Trafford Centre has increased steadily since Covid and in the first half of 2024 was 11.2% up on the same period in 2023. Monthly turnover has also increased, rising from around £47m in January 2024 to £60m at the end of June. The managers of the centre said moving annual turnover for the first half was up by 13.3% on H1 2023, resulting in an additional spend of £37m over the period.
Well-performing retail segments in the mall include health and beauty, where the introduction of Sephora in May has helped boost sales by more than 40%. The addition of a Lego store last November has helped sales across the gift, toys and cards segment, also up by more than 40%.
Men’s fashion and leisure both saw sales decrease, down by 5% and 2% respectively on H1 2023.
Despite being hit by a number of CVAs, including Body Shop, Ted Baker and Kids Cavern, rent collection was back at “historic high levels” with £44.7m – some 99% – of rent collected by 30 June 2024.
The owner said that while 2023 had represented a significant spike in expiry income – some 26% of income expired – this had now been mitigated and its new five-year plans showed a “softer profile”, with expiries peaking in 2028, albeit at a “far smaller peak” than 2023.
So far this year, a total of 13 new leasing deals have been agreed at the mall, representing £11m of rent. Deals have been achieved at some 30% ahead of ERVs. Actual net effective rents were 27% ahead of passing rent.
Investors will be updated on plans on 16 October.
Photo by CHINE NOUVELLE/SIPA/Shutterstock
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