Case Studies

Retail

Templars Square Shopping Centre, Cowley

Acquired in April 2002 for £26 million, this shopping centre of some 270,000 sq ft was in desperate need of “love and attention”. The anchor store, Sainsburys, had vacated some two years prior to our acquisition and had boarded up the unit. With around thirteen years remaining on its lease, in spite of its vacancy, the anchor store assisted in making this scheme eminently fundable.

The centre presented itself as a tertiary parade of shops. Whilst it fronted the main road, there was no indication that a substantial covered shopping centre was to be found behind. The centre housed, amongst others, Woolworths, WH Smith, Boots, Kwik Save, Peacocks and New Look.

Footfall in the centre was low; there were no retailer requirements for Cowley and any retailer visiting the Town Centre was unable to find the scheme due to its lack of signage.

Over the next two years or so, our many asset management initiatives included the following,-

Morale at the centre was low both amongst staff and occupiers. We met every tenant in the centre, placing as much importance on the florist in the mall as the manager of Woolworths. We arrested despondency amongst the staff.
We were successful at completing rent reviews that had been outstanding for two years and ignored by our predecessors.
We set about putting Cowley on the retailers’ map by generating a regular newsletter and other advertising initiatives.
We committed significant capital of our own to refurbish the outdated services and obtained planning permission to erect substantial signage at the centre.

When we acquired the scheme, the passing rent was £1.8 million per annum, with an ITZA rate of £40 per sq ft; when we sold the centre in November 2004 for £46.5 million to Threadneedle, we had grown the income to £2.8 million per annum and an ITZA of £60 per sq ft.

Haymarket Shopping Centre, Leicester

Leicester City Centre is one of the UK's top retail locations. The Haymarket Shopping Centre, comprising some 350,000 sq ft is the "value" scheme in Leicester and is situated opposite the Shires Shopping Centre.

This asset was of significant interest to both public property companies and institutions. However, it was held in a complex corporate structure by Kingfisher Plc.

Fairacre's persistence and technical skill enabled us to overcome the numerous issues in the acquisition, allowing us to succeed against our larger competitors.

Having unlocked the opportunity, we proactively managed the scheme, completing a number of outstanding rent reviews, rationalising and co-ordinating a potential development site to the rear and entered into detailed discussions with Leicester City Council relating to the purchase of the car park. With so much activity in Leicester City Centre, it was imperative that we kept the Haymarket Centre at the forefront of the Council’s mind and we became heavily involved with the Leicester re-generation committee.

In a short space of time, we had repositioned the opportunity from a complicated corporate transaction, to a straightforward, prime real estate asset with added value potential.

In November 2004 we sold the scheme to ING for £77.75 million.

Industrial

Multi-Let Industrial Estates in Leeds, Windsor, Middlesborough and Camberley

4 estates were purchased between 1999 and 2003 for between £2 - £5 million.

All of the estates were of differing age and condition and required concentrated "hands on" refurbishment/redevelopment/asset management attention. After successfully completing the asset management initiatives, the estates were sold in 2004/2005 to show an IRR in excess of 25% to a variety of institutional and property company investors.