Royal London AM buys 50% of Milton Keynes shopping centre

Royal London Asset Management Property has acquired AustralianSuper’s 50% share in Centre:MK in Milton Keynes. The asset is one of the UK’s leading shopping centres with an annual footfall of over 21 million.

A Grade II listed, purpose-built shopping centre constructed in 1979, Centre:MK spans 1.3 million sq ft in the centre of Milton Keynes, located approximately 50 miles northwest of London. Representing 80% of the city centre’s total retail space, it is the dominant shopping destination in the region.

Anchored by leading national retailers including M&S, John Lewis, Harrods H Beauty, TK Maxx, Boots, and Next, the centre has a stable income stream and a low 4.4% vacancy rate compared to the UK average of 10%.

Healthy supply-demand tension, supported by robust tenant interest and rebased rents, offers potential for sustained income growth, the group said. The shopping centre also has a modern multistorey 1,400 space car park which incorporates parking assist technology.

“This acquisition marks a significant move for Royal London Asset Management Property, demonstrating our confidence in the retail market’s recovery and the future success of well located, best-in-class shopping centres such as centre:mk,” said Paul Nicholson, senior asset manager at Royal London Asset Management Property. “As consumer confidence improves, low inflation and high earnings growth are expected to enhance spending power, subsequently boosting retailers’ sales. Centre:MK, as a catchment-dominant shopping centre, is poised to benefit from this recovery.”

The acquisition aligns with Royal London Asset Management Property’s strategy to invest in well-let and re-priced shopping centres with a strategic Net Zero Carbon pathway, delivering core income returns from rebased rents with capital growth potential, the group said.

The remaining 50% share of the shopping centre is owned by Federated Hermes on behalf of BTPS.

“Underpinned by high footfall and sales, centre:mk offers a strong, stable income stream coupled with a low vacancy rate, significantly below the UK shopping centre average, highlighting its resilience and appeal”, said Nicholson. “This acquisition enhances our balanced portfolio by increasing our retail sector exposure. We anticipate strong returns and excellent rental growth, and look forward to working with Federated Hermes to further centre:mk’s success.”

Retail forms an important component of Royal London Asset Management Property’s strategy, as demonstrated by the recently announced plan to undertake a significant revitalisation of its two-acre Mayfair Quarter – formerly Lancashire Court – off New Bond Street in Central London.

The purchase of Centre:MK follows Royal London Asset Management Property’s sale of Quedgeley Retail Park in Gloucester to Frasers in September, and the Homebase in Winchester in October.