Troubled UK retail REIT Intu properties has sold the Sprucefield Retail Park, near Lisburn, in Northern Ireland for £40 mln (€47 mln) to NewRiver REIT.
The disposal - at £30 mln lower than its acquisition price - is 'in line' with the June 2019 valuation, according to Intu. The deal equates to £19 per ft2, on an annual net rent of £3.7 mln.
Colm Lauder of analysts Goodbody said: 'The sale of Sprucefield is another important cash-generative disposal for Intu as it works to reduce its loan-to-value.
'However, the agreed price at a net initial yield of 8.7% and £30 mln below the price Intu acquired the asset for in 2014 highlights further the dramatic erosion of value in the UK retail park segment.'
Intu purchased the five unit, 231,000 ft2 (21,460 m2) asset from Westfield in May 2014 for £70 mln. Shops at the centre include Marks & Spencer, Boots, Next, Pets at Home and Mothercare, the latter of which is earmarked for closure. There is also a McDonalds fast food outlet. A large Sainsbury’s superstore and Currys/PC World are situated adjacent but in separate ownership.
In a statement, NewRiver said that it has identified significant opportunities to extract value through active asset management and the disposal of parcels of land for development.
Under Westfield’s ownership, a large expansion plan was proposed which included adding 19 new retail units and a John Lewis store. However, the planning application was withdrawn following political pressure to prioritise city centre retail development in Belfast.
Intu had proposed its own expansion plan for Sprucefield in 2018, without a John Lewis. The £50 mln proposal included building 13 new retail units and an 80-bedroom hotel.