There has been strong second round bidding for the Merry Hill shopping centre in the West Midlands, which is likely to have pushed the final price past the £270 million guide.
CoStar News understands that retail giants InterIkea, which is connected to the Swedish furniture giant Ikea, and Frasers, the retailer founded by Sports Direct tycoon Mike Ashley, are among the final parties eyeing the mall. Its owners announced that the UK super-regional centre in Brierley Hill, spanning more than 1.4 million square feet of retail, hospitality and leisure, was being placed on the market in September. Knight Frank is the agent.
Merry Hill is the ninth largest UK mall by spend potential and has undergone a £125 million investment programme in the last few years.
It is now over 96% let, following a landlord investment programme, asset management by Sovereign Centros from CBRE, and a busy leasing strategy, the owners said when it launched. Footfall in 2025 is on course to top 15.5 million for the first time.
The centre has stabilised its anchor tenants, introducing over 300,000 square feet of new and upgraded space from leisure concepts such as Hollywood Bowl and Funstation, alongside national debuts for Harvey Norman and XF Gym, and a revamped 100,000-square-foot M&S. The 92-acre site, which includes a fully-let retail park, has also introduced ESG initiatives, with over 2,700 solar panels generating 25% of its operational electricity requirement and more than 100 EV chargers installed and in use.
Frasers has been one of the most active buyers of shopping centres and retail parks in the UK in recent years. At present it 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.
CBRE advises Frasers.
Swedish furniture giant Ikea bought the Churchill Square shopping centre in Brighton from Abrdn's Aberdeen Standard Property Unit Trust for a price understood to be around £145 million in 2023, in a deal first tipped by CoStar News in May of that year.
Ingka Centres, which is part of the Ikea retail and Ingka Investments family, has been buying shopping centres to create urban meeting places in recent years, including smaller Ikea stores as well as local start-ups, pop-ups and food outlets run by local entrepreneurs. The developments are seen by the group as a global template for its response to dramatic shifts in retail trends. In 2021 it announced an £170 million investment buying and developing the Kings Mall shopping centre on Hammersmith's main high street in its first so-called "urban meeting place", with a second downtown development then underway in San Francisco. It has recently opened a major store in the former Top Shop on London's Oxford Street.
Shopping centre group Intu, which owned Merry Hill, collapsed into administration in June 2020. It owned and operated 17 shopping centres across the UK including Trafford Centre, Lakeside and MetroCentre.
Each of the shopping centres was owned individually by special purpose vehicles, or propcos, which were outside of any insolvency process and continued to trade as normal under the control of their directors. Different asset managers were appointed at the malls, while some have been sold to new owners.
The consortium of lenders that own Merry Hill include Wells Fargo and Axa Investment Management. Former Grosvenor director Miles Dunnett was appointed to the board overseeing the redevelopment of the shopping centre in 2021.