Intu and joint venture partner M&G Real Estate have acquired the long leasehold on the former BHS store within the Manchester Arndale shopping centre, and are “working up options” for the 110,000 sq ft unit.
The acquisition was announced within shopping centre group Intu’s quarterly results released this morning, which showed footfall was up across its centres in the UK by 1.2%.
The 1.4m sq ft Manchester Arndale is jointly owned by Intu and M&G. The large BHS unit on the corner of Market Street and High Street had remained out of the landlords’ control until the department store went into administration earlier this year.
Intu had 10 BHS stores within its portfolio, amounting to 1% of its overall rent roll.
The statement to the stock market said that Intu had “acquired the long leasehold of the unit at Manchester Arndale which provides a strategic addition to our JV holding”. According to Kannika Mall, asset manager for M&G, the joint venture is now considering whether to let the store as a whole, or split into smaller shops. The unit is expected to remain in retail use.
Manchester Arndale is one of Europe’s largest inner city shopping centres. Earlier this year Intu and M&G announced plans to rework several units to create an £11m food court in the centre, known as Halle Place.
Intu’s quarterly results said that occupancy across its portfolio is 95.6%, a reduction of 0.6% against June 2016 which was at 96.1%. New lettings in the year “have more than offset the 1% impact from the closure of BHS”.
David Fischel, Intu chief executive, said: “We continue to demonstrate the attractiveness of our top quality prime shopping centres to shoppers, to retailers and to global investors, with increased footfall, good progress on lettings and rent reviews and the disposal of Intu Bromley at a consideration above June 2016 market value. The business has a pipeline of attractive organic investment opportunities in both the UK and Spain which will enhance Intu’s long-term growth potential.”
Shares in Intu were down 3.3p this morning to 288p.