The council has bought the Rochdale Central Retail Park and a neighbouring 4.7-acre plot next to the railway station from property investor Town Centre Securities.
The 70,000 sq ft park next to the town’s railway station includes tenants Argos, Halfords, Matalan, and Poundstretcher, all of which are on relatively short leases. The park generates an annual net rent of £1.15m with average rents at £16.50/sq ft.
TCS’ unconditional sale is set to complete on 4 January next year and the proceeds will initially be used by the company to reduce debt. The sale is part of TCS’ move away from retail and leisure, which has seen the company reduce its portfolio from 70% retail to 55%.
On completion of the sale of the park, TCS will further reduce its retail and leisure portfolio to 52%. As of 30 June 2018, the combined site was valued at £14m, meaning the council paid circa £800,000 under the valued price.
Edward Ziff, chairman and chief executive of TCS, said: “This disposal is in line with our on-going strategy of repositioning TCS’s portfolio; reducing our exposure to mature out-of-town retail, and enabling further diversification of our assets and investment in our development and investment pipeline.
“Despite making significant improvements to the retail park in recent years we identified this asset as having further downside potential. This sale removes that risk whilst at the same time having the benefit of lowering debt and giving further headroom for future investments.
“Our recent sales and purchase activity reflect our strategy of investing in assets that offer the ability to create value and income through intensive asset management. We continue to concentrate our, now smaller, retail portfolio by targeting good value prime assets or supermarket and convenience retail. We see this approach as being key to generating long term growth and taking advantage of the tough retail environment.”