LONDON-A joint venture between British Land and Land Securites has bought Princes Square and Southgate in East Kilbride Shopping Centre for euro 86.6 million ($112.6 million). The venture, Scottish Retail Property LP, already owns the remainder of the 1.2-million-sf East Kilbride center. The latest deal creates one of the largest centres in the UK and the largest in Scotland. Princes Square was bought from Prudential for euro 52.8 million ($69.4 million) at a 6% yield. Built in 1997, the center comprises 45,843 sf with 14 units, including a popular Carlton Club bingo hall. The partnership's bid of euro 34.9 million ($45.9 million) for the space, formerly owned by Scottish Mutual Assurance plc, was accepted over two other offers.
"First and foremost, these acquisitions show long-term commitment to further developing our retail pitch in East Kilbride," says a spokesman for the partnership. "With the town facing increased competition from neighboring retail developments, this gives us the opportunity to create new standards in the retail offer to benefit both retailers and consumers. We are now better placed to create synergy between the malls, adding to a more enjoyable shopping environment.
"In particular," he continues, "we aim to meet the changing needs of retailers. Over recent months, demand has been increasing for larger space--usually 3,000 to 5,000 sf--and both Princes Square and Southgate present a variety of opportunities for reconfiguration to improve unit sizes. This is likely to generate more interest from retail giants and attract new flagship retailers keen on securing their first outlet in Scotland."
"It made good strategic sense to acquire the retail assets in East Kilbride adjoining existing partnership holdings," adds Merrick Marshall, also of the partnership. "Through one ownership, we can take this once-in-a-generation opportunity to unlock the real, sustainable potential of East Kilbride as the dominant retail center for South Glasgow. It will also provide benefits of scale for the management of the center as well as an opportunity to improve circulation and secure more unified control of the malls. There is no doubt that a coordinated asset-management and tenant-mix strategy will strengthen the entire town."
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