Capital & Regional has agreed a £40m deal to buy the 415,000 sq ft The Gyle Shopping Centre in Edinburgh.
The company is financing the purchase through existing funds, a new debt facility of £16m and the approximately £25m of gross proceeds to be received pursuant to a fully underwritten open offer.
The Gyle Shopping Centre, which generated footfall of 8.6 million last year, sits on a 50-acre site and is anchored by M&S.
Lawrence Hutchings, chief executive officer of Capital & Regional, said: “The strong operational results and continued valuation stabilisation we are reporting today give us considerable confidence in our own portfolio, platform and UK community centres strategy, as well as the physical retail market where many of the structural changes are maturing.
“This confidence is also reflected in our announcement this morning of the acquisition of The Gyle Shopping Centre in Edinburgh, which marks the first step towards rescaling our business and fully leveraging our proven skills and management expertise. This acquisition allows us to capitalise on an opportunity to add an established dual supermarket anchored community centre in Scotland’s capital city to our portfolio, in a transaction that will be part-funded by a £25m equity raise available to all existing shareholders and fully underwritten by our majority shareholder, Growthpoint.
“The centre will be accretive to income from day one, with the agreed price representing a significant discount to the replacement cost and providing us with a highly attractive entry point from which we can create value. In addition, we have arranged terms with Morgan Stanley to staple debt to the acquisition at a 40% LTV capped at a cost of 6.5% fixed for 5 years.
“We have also identified a number of asset management opportunities to create value including refining the tenant mix, a renewed focus on leasing to improve occupancy and income, whilst enhancing the centre’s appeal to the growing and affluent catchment in south western Edinburgh.”
In its H1 2023 results, published today (10 August), Capital & Regional reported a 19% increase in adjusted profit, a 2.3% increase in net asset value and a proposed 10% increase in its interim dividend to 2.75p per share.
