Frasers, the highly acquisitive UK retailer and investor, is in talks to buy the Swindon Designer Outlet from LaSalle Investment Management for up to £275 million, as it also nears a deal to buy the Braehead shopping centre near Glasgow for around £220 million, CoStar News understands.
The retailer, founded by Mike Ashley, is also understood to be among the initial bidders today for the Merry Hill shopping centre in Dudley in the West Midlands, which is expected to sell for more than £260 million.
Canadian investment manager giant Brookfield refinanced two UK retail outlet centres owned by LaSalle Investment Management for £450 million in its largest European property loan transaction last month, which has prompted unsolicited bids for the centres.
The two assets, Cheshire Oaks Designer Outlet and Swindon Designer Outlet, were acquired by LaSalle Investment Management in 2022 and are managed by McArthurGlen. They are ranked number one and number five respectively based on footfall and sales performance in the UK.
LaSalle completed the purchase from Nuveen in a deal first tipped by CoStar News. The investment at a yield of around 6% was made through LaSalle’s value-add investments business line.
Most of the portfolio value came from Cheshire Oaks Designer Outlet which is spread over 400,000 square feet and made up of over 160 individual units. The outlet is home primarily to premium brands, with occupiers including Burberry, Polo Ralph Lauren and Nike.
Swindon Designer Outlet has over 250,000 square feet. The outlet includes 100 stores, with Tommy Hilfiger, Calvin Klein and Lacoste among the occupiers.
CoStar News revealed last month that Frasers was in advanced talks to buy Braehead. SGS Retail, the lender vehicle which owns the mall, has been preparing to bring the 811,000-square-foot centre to market via JLL. But sources, who declined to be quoted on the record, said the vehicle had opened off-market discussions to sell the centre to Frasers.
SGS took control of four large UK shopping centres following the collapse of Intu in 2020: Lakeside in Essex, atria Watford, Victoria Centre in Nottingham and Braehead. Last year OakNorth, the digital bank for entrepreneurs, partnered with Lloyds on a £445 million club loan to SGS Group to refinance the malls.
Frasers has been one of the most active investors in UK real estate in recently years. In October, it completed the acquisition of two shopping centres and a retail park comprising more than a million square feet – Princesshay Shopping Centre in Exeter, Fremlin Walk Shopping Centre in Maidstone and The Olympus Centre in Gloucester.
Braehead joins a number of ongoing major UK shopping centre processes at present including Silverburn in Glasgow, the Lexicon in Bracknell and Merry Hill.
CoStar News revealed Knight Frank brought Merry Hill in Brierley Hill, the West Midlands to market last month. Bids were due today, with Frasers understood to be involved. Other bidders are understood to include InterIkea, Veld Capital and Landsec.
The UK super-regional centre, spans more than 1.4 million square feet of retail, hospitality and leisure The owners said Merry Hill is the ninth largest UK mall by spend potential and has undergone a £125 million investment programme in the last few years.
All parties declined to comment.