Leeds puts Hornsea Freeport up for sale

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LEEDS BUILDING Society is marketing Hornsea Freeport to turnaround investors for between £4m to £5.5m.

The mutual took control of Britain’s first factory shopping outlet centre via an administration process in 2010 after it fell victim to the downturn in consumer spending.

Leeds had lent £16m to former owners Hornsea Estates and Hornsea Estates (No.2) in 2007.

The centre was valued at £7m when Leeds acquired the asset.

The society said it has decided to take Hornsea Freeport to market after attracting interest from two private investors.

Kim Rebecchi, sales and marketing director, told The Yorkshire Post: “Obviously it was at a time when the crisis had just happened, the market wasn’t positive for us to sell it so we decided to trade it ourselves for the medium term.

“It was never in our long-term strategy that Leeds Building Society would be the long-term owner of a shopping outlet centre.

“We did it because there were was quite a lot of jobs at stake. There were 250 people working there. We wanted to make sure that over time that we could trade it and when the market turned we would be able to sell it.”

She said the shopping centre is 75 per cent full, with tenants including Clarks, Edinburgh Woollen Mill, The Works and Mountain Warehouse.

It turns over nearly £8m and employs 182 people. Around 800,000 people visit each year, down from one million during peak years.

Hornsea Freeport covers a 20-acre site and includes a lake and model village.

Freeport bought the centre in 1994 from Peter Black, the Keighley-based Marks & Spencer supplier, and made it the base for its expansion.

It sold the centre for £17.25m in 2005 to a consortium of buyers called Stream Estates.

The centre is being positioned by sellers as an opportunity for turnaround investors.

Marketing literature states: “The outlet sector’s value orientated offer appeals to today’s cost conscious consumer, while property investors are increasingly attracted to the sector’s growing reputation as a responsive retail asset class...

“In recent years, Hornsea Freeport has seen limited capital investment and a decrease in retail occupancy.

“At the same time, well established leisure attractions have either fallen into disrepair or been closed. The centre’s established reputation with local consumers and tourists from the wider region, offers significant asset management potential for investors with retail expertise to consolidate Hornsea Freeport’s position as one of the principal family destinations situated on Yorkshire’s east coast.”