The flagship Silverburn mall in Glasgow, one of Scotland’s biggest shopping centres, has been bought by Henderson Park, a London-based private equity firm, for £140 million. The sellers were joint venture partners Hammerson and the Canada Pension Plan Investment Board.
The off-market transaction was undertaken alongside Eurofund Group, a Madrid-based privately owned investment company, who will act as Henderson Park’s operating partner.
Silverburn, a 100,000 m2 shopping centre with 125 units including the largest Tesco in Scotland, was opened in 2007 and a leisure extension was added in 2015 to add more F&B units and a 14-screen cinema. The mall sits on a 67-acre freehold site and has 4,500 parking spaces.
Henderson Park noted that Silverburn is a top 20 UK shopping centre located in a wealthy suburb of Glasgow, the UK’s fifth-largest city and as its newest and highest quality shopping centre it has a wide and affluent catchment area of around 1.9 million people. The centre also benefits from strong transport links and has historically generated a high footfall of 15 million.
Despite the health crisis, rent collection has been “strong” at 92% in the last quarter and the centre is 78% occupied with a high quality tenant mix.
“Silverburn with its large catchment area close to one of the U.K.’s largest cities has limited direct competition and posted robust footfall levels and cash collection this year”, said Christophe Kuhbier, Managing Director, Henderson Park. “With retail valuations under pressure in recent years, we have been monitoring the UK prime retail market and we see here an excellent opportunity to acquire this asset off-market and invest in a modern asset with immediate upside potential”.
Henderson Park and Eurofund will invest targeted capital to maximize Silverburn’s potential and deliver strong returns to investors. The asset management plan aims to attract new occupiers that focus on leisure, food and beverage and experiential retail sectors, completing the repositioning of the asset as a premier retail and leisure destination.
“We are excited by this opportunity to unlock latent value from this exceptional Top 20 UK shopping centre asset which has to date been underperforming”, said Ian Sandford, Chairman, Eurofund Group. “We aim to use our team’s asset management and operational expertise to bring the shopping resort concept and return Silverburn to the offering and performance levels the people of Glasgow deserve and to help it exceed its potential”.
Glasgow’s profile in the UK was highlighted recently as it was selected as the host city for climate change summit COP26.
This latest deal brings Hammerson’s total gross proceeds from sales in 2021 to £495 million, in line with the company strategy of disposing of non-core assets to reduce debt, simplify the portfolio and generate capital for redeployment.