Commenting on the purchase, Gary Roberts, managing director of Praxis, defended the future of physical retail stores in the face of the rise of e-commerce, describing the current state of the retail industry as “Darwinism in action”.
Westmorland Shopping Centre is a 100,000 sq ft centre in Kendal, and has been controlled by BDO since previous owner Ethel Austin Properties went into administration in 2015. The scheme includes an outdoor market and multi-storey car park.
Praxis said it intends to invest in the asset, before “leveraging its extensive retailer network to attract new brands to the town”.
Roberts said: “Secondary shopping centres, or more specifically, community retailing is a sector that we have been actively monitoring for the last 12 months. Whilst we accept that the market is going through a seismic and fundamental structural change, the populist view that the exponential rise of e-commerce will eliminate the need for the physical store is fundamentally flawed.
” This is Darwinism in action, and the weakest parts of the market will continue to be undermined while fit-for-purpose and appropriately sized shopping destinations will remain at the centre of every retailer’s multichannel sales offering.
“Until this transformation is complete, we expect there to be high levels of volatility within the sector which will result in extractable value for investors, like us, who know what to do and, crucially, are patient and able to weather the storm.
“Westmorland Shopping Centre fits our criteria in terms of dominance and demographic but it has been woefully mismanaged for years and therefore represents a highly viable opportunity to grow income through a deliverable leasing strategy which will, in turn, enable us to achieve an attractive return in what is otherwise a very tight property market.”
Praxis was advised by Finn & Company while CBRE advised administrator BDO.
Commercial property investor Praxis specialises in regeneration across the UK. Its portfolio currently extends to around £1bn of UK commercial property and development land, and includes shopping centres in Salford, Leeds, Preston, Peterlee and Plymstock.