Chester’s Grosvenor Shopping Centre sold

Northern Ireland-based Martin Property Group has acquired the freehold of the 211,000 sq ft city centre retail asset from Grosvenor’s Eaton Estate. 

The purchase of Grosvenor Shopping Centre sees MPG add to its growing portfolio of North West retail complexes, which includes Fishergate in Preston, Clarendon Shopping Centre in Hyde and Exchange Shopping Centre in Rochdale. 

Long-leaseholder HIG Capital placed the Chester shopping centre into receivership in 2020 but the complex continues to trade. HIG acquired the leasehold from Carlyle Properties and Bride Hall Estates for £65m in 2015. 

MPG’s freehold acquisition is separate from the ongoing receiver action but it is understood the developer is also in talks to acquire the leasehold, which has around 125 years to run. 

MPG did not disclose how much it paid for the shopping centre. The asset was being marketed by Knight Frank with a guide price of £21.2m, reflecting a net initial yield of 9.56%.

Grosvenor Shopping Centre generates £2.1m of net income a year, according to marketing materials. The complex is let to occupiers including TK Maxx and Sports Direct and features a 94-bedroom Leonardo Hotel and a 400-space multistorey car park on Newgate Street.

“The Grosvenor Shopping Centre is a very important asset within Chester and we are delighted to take on its stewardship, a responsibility which we take very seriously,” said Gary Martin, Martin Property Group director. 

“As family businesses, we share similar values with Grosvenor, which has been an important part of this acquisition for all parties.  As custodian of this asset, we look forward to creating strong working relationships with key stakeholders, including Cheshire West and Chester Council, as we work together to ensure the future success of the centre.” 

A spokesperson for Grosvenor’s Eaton Estate said: “With the continued challenges facing the high street, and as Grosvenor has not owned or managed the shopping centre business since the 150-year head lease was granted in 1996, we believe that selling the freehold of the site to the Martin Property Group, which has established a reputation for sympathetically revitalising shopping centres across the UK and Ireland, provides the best opportunity to develop its offering and enhance the retail and leisure experience in the heart of the city.”

Steven Lewis of Lewis & Partners acted on behalf of Martin Property Group alongside Mark Kingsley who is chief legal counsel to the Martin Property Group.

Brabners and Metis Real Estate Advisors acted for Grosvenor.

To learn more about the changing face of retail and hear from Grosvenor, you can attend Place North West’s Future of Retail conference on Thursday 15 September.