Meadowhall overcoming the downward retail trend

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MEADOWHALL shopping centre is trading “exceptionally well” given the challenging economic environment, according to part-owner London & Stamford.

The property company, which has a 50 per cent stake in Meadowhall, said the Sheffield centre produced “excellent” final quarter results in 2011.

Footfall in December increased by 8.6 per cent and sales were up 7.14 per cent.

Overall for the full calendar year, footfall growth was 1.2 per cent and sales growth was 0.15 per cent, despite a generally very poor picture nationally for retailing.

It emerged last month that London & Stamford was looking at selling its 50 per cent stake.

The group is likely to make a fat profit on its investment in the centre. The other half is owned by property company British Land.

London & Stamford said the anchor stores at Meadowhall, particularly House of Fraser, Next and Primark, have shown “impressive” sales increases in the year.

Following the completion of the refurbishment works to the Oasis food court in October, London & Stamford said the new restaurants have reported strong sales figures.

Since October, 17 new leases have been exchanged, including TK Maxx, Internationale, Urban Outfitters and Carluccio’s.

The group said initial letting meetings in the new year have identified considerable new tenant interest. London & Stamford said this should outweigh any risk to Meadowhall from recent administrations.

It said the administrations are likely to have only a very limited impact, with affected units likely to continue to trade under new ownership or pre-pack arrangements.

The Sheffield centre has bucked the retail downturn and thrived during the recession.

It is thought that a number of overseas buyers, including sovereign wealth funds, would be keen to buy the stake.

Overseas investors are keen to snap up prime UK retail sites, but there are few sellers.

Meadowhall is currently run by a dedicated management team set up by London & Stamford and the other 50 per cent owner British Land.

If London & Stamford does sell its stake, which could be worth £800m, British Land will have to decide whether to also cash in the profits and sell its 50 per cent share. London & Stamford bought the 50 per cent stake three years ago. The seller was British Land, which guaranteed the rental income until 2012.

Meadowhall opened 23 new lettings in 2011, including Vans, Boux Avenue, Thomas Sabo, Moss Bros, Crumpler, Collard Manson, Mimco, LKBennett, Guess and Krispy Kreme.

The surge of new lettings over the past year has given the centre one of the lowest empty unit rates across the country. Overall sales at Meadowhall rose by one per cent in the six months to September 30. One of Meadowhall’s anchor tenants House of Fraser has recently undergone a £5m refurbishment.

Meadowhall recently completed a £7m refurbishment of the centre’s Oasis Dining Quarter, which how has a range of restaurants including ChaoBaby, Giraffe, Las Iguanas, Harvester, Wagamama, TGI Fridays and Rice.

In an interim management statement yesterday, London & Stamford said it has an £800m war chest for investments in 2012.

Chief executive Patrick Vaughan said: “The outlook for property in the United Kingdom continues to be very uncertain with difficulties within the eurozone continuing and remain a long way from being resolved. The UK economy also remains stagnant.

“However, we strongly believe that there will be significant opportunities in 2012 for those investors with cash and access to debt with the ability to move quickly.

“We are determined to continue to make investments with the potential to deliver strong, sustainable income whilst adding shareholder value through the implementation of asset management initiatives.”

ros.snowdon@ypn.co.uk