St. Modwen has sold the freehold of a 52,000 sq ft Morrisons foodstore to South Yorkshire Pensions Authority at its £15 million Connahs Quay retail development in Flintshire, North Wales. The Fund has acquired the store for £11.8 million, reflecting a net initial yield of 6.65% and the transaction will trigger development works on the site which also comprises 20,000 sq ft of retail space and a 325 space car park.
St. Modwen is currently letting the retail space to a variety of local and national retailers and will manage the centre once it is built.
Paul Batho, senior development manager at St Modwen, said: “There are very few developments of this nature starting on site at the moment and this, coupled with the dearth of activity in the property investment market, represents a huge vote of confidence in both the Deeside area of North Wales and St Modwen.
“A number of retailers have already agreed terms for the scheme and we hope to be able to make a further announcement on the tenant line up shortly. The smaller units will be occupied by a mix of retailers both local and national, some of which were tenants in the original 1970’s centre.
“Retailers see a fantastic opportunity to trade in the fully modern shopping environment that we are creating whilst benefitting from the footfall generated by an anchor foodstore such as Morrisons.”
Rob Millington, head of investment at Cheetham & Mortimer, said: “Despite tough conditions, this deal proves to a skeptical market that development funding is available for high calibre investments, although the defensive quality of the supermarket sector and the substantial nature of the developer were key drivers in delivering a satisfactory outcome.”
Demolition of the old, 1970s style centre started in June 2009. It is scheduled to be completed later this summer and anticipated that the start on site will follow shortly afterwards. It is currently projected that the new scheme will be completed in the summer of next year
Standard Life Investments and Whitaker Horton advised South Yorkshire Pensions Authority, while Cheetham & Mortimer advised St Modwen.
Outline planning consent was granted to St Modwen in April 2008. Detailed planning consent was granted in July this year.
Notes to Editors:
St Modwen is the UK’s leading regeneration specialist, operating across the full spectrum of the property industry through a network of seven regional offices and a Birmingham based head office. The company is wholly focused upon regeneration with expertise in brownfield land renewal, partnering with industry, town centre regeneration, Innovation Centres and education projects. www.stmodwen.co.uk