C&R churns Buttermarket

Published:  20 February, 2017

Ipswich centre bought for £9.6m and sold two years later for £54.7m

Capital & Regional has sold the Buttermarket Centre, Ipswich to the National Grid Pension Fund for £54.7 million, at an equivalent yield of 5.9 per cent. The deal shows an IRR of over 40 per cent on the total investment.

The Buttermarket centre was held by C&R in a 50:50 joint venture with Drum Property Group. The JV bought the centre in 2015 for £9.6m, when it was 43 per cent occupied by area, and invested £25.1m of capital to transform the scheme from a tired shopping centre into a vibrant retail and leisure destination.

A number of complicated asset management challenges were overcome in the process and the 235,000 sq ft centre is now 89% let and is anchored by a 12 screen Empire cinema and family entertainment centre; relocated and upsized TK Maxx and New Look units; a 20,000 sq ft Pure Gym; and nine new restaurant units now occupied by Coast to Coast, Byron, Wagamama, Prezzo and Cosy Club.

The net proceeds to Capital & Regional are expected to be £13.5m after the purchaser assumed £19m of debt. Capital & Regional will recycle the proceeds from the sale into new investment opportunities.

Chief Executive Hugh Scott-Barrett said: "The completion of such a complex and transformational project in just a two year period is a great showcase for our particular expertise and asset management skills, and the IRR we have delivered is a strong testament to the success of the investment. Following on from the successful sale of The Mall, Camberley, this disposal provides us with significant capital to reinvest into higher yielding opportunities.”

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