Global investment manager Nuveen is selling its 50% interest in the Princesshay estate in Exeter, a major UK shopping centre plus retail, offices, restaurants and leisure in the heart of the city.
Savills has been appointed to sell the stake and is thought to be seeking around £40 million. The Crown Estate owns the remainder.
It is Exeter’s primary shopping centre in the centre of the city and also includes other retail, food and beverage, leisure, car parking and commercial properties across the surrounding high street pitches.
The mall comprises 400,000 square feet of part-open air, part-covered retail and F&B provision attracting 10.6 million in 2023, reports Savills. The scheme is configured with a range of malls and parades, connecting the shopping centre to the surrounding retail pitches, including High Street, Princesshay Square, Roman Walk and Paris Street. There is 630,000 square feet of floorspace across the estate.
Tenants include Reiss, Next and Zara.
Included in the estate are two car parks, Princesshay Car Park and Summerland Gate Car Park, providing over 500 landlord-controlled car parking spaces, contributing 4.63% of total gross income.
Nuveen bought its half of the estate from Landsec in 2014 as part of a strategic swap that saw Landsec take its ownership in Buchanan Galleries in Glasgow.
In 2024, the partnership’s asset management is focused on growing income through securing a new operator for the former department store and improving the leisure and F&B provision. In addition, a 2024 priority includes progressing discussions with Exeter City Council on the City Point development across Sidwell Street and Paris Street to provide office space, hotel, residential and ground floor retail and leisure on the 7.5 acre site.
Total gross income across the Princesshay ownerships is £9,101,171 per annum, producing a net operating income of £6,278,143 per annum.
The sale will be another important test of market sentiment for shopping centres at the beginning of 2024. On Monday, CoStar News revealed that two large shopping centres in Horsham in Sussex and Burton-on-Trent in the Midlands are being sold by receivers as the mall investment market is seeing a fragile improvement in activity.
On Wednesday, CoStar News revealed that the private owner of Frenchgate, the 768,000-square-foot shopping centre in the heart of Doncaster, has appointed Savills to seek £35 million or a 10.5% net initial yield.
The year has already begun strongly for UK shopping centre investment thanks to US investment giant Lone Star's return to the sector with the £111 million acquisition of Union Square in Aberdeen from Hammerson, as revealed by CoStar News.
A number of mall repurposing sales are launching to tap into increasing appetite from debt-backed private equity for such opportunities.
But confidence remains fragile with the market keen to see progress on larger ticket sales, particularly ADIA's stake in Liverpool One and British Land's Meadowhall that have been ongoing since last year.