Capital & Regional REIT buys Edinburgh mall for £40m

UK focused REIT Capital & Regional, which has a portfolio of community shopping centres, has completed the acquisition of The Gyle Shopping Centre in Edinburgh.

In August the company agreed the acquisition for a total of £40 million to be financed through existing funds, a new debt facility of £16 million and a £25 million equity raise.

The Gyle, a 38,555 sq m (415,000 sq ft) community shopping centre on a 50-acre site in Edinburgh, has 88 shops anchored by a Marks & Spencer store and Morrisons supermarket.

Capital & Regional said in a statement that the centre will require minimal immediate capital expenditure but added that there is “a medium-term opportunity for significant value add initiatives”.

The asset is being acquired at a net initial yield of 13.51% that is expected to rebase to around 12%. The centre produces a gross annual rent of about £6.8 and is 94% occupied. There is a weighted average unexpired lease term of 2.1 years.

“The acquisition of The Gyle Shopping Centre, supported by the successful equity raise reflects the confidence that investors have in our needs-based, non-discretionary community centre strategy, our management platform and portfolio,” said CEO Lawrence Hutchings. “These grocery anchored centres are part of essential community infrastructure and continue to demonstrate the resilience and importance of physical stores to retailers.”