CSC close to Trafford Centre deal
Capital Shopping Centres has confirmed that it is in advanced talks with Peel Group about buying the Trafford Centre near Manchester. If the deal is agreed, it would imply a £1.6bn purchase price for the shopping centre, which has 1.9m sq ft of retail, catering and leisure space and attracts 35m customer visits annually.
CSC, responding to press speculation about the deal, said the purchase would strengthen its position as the leading operator of pre-eminent UK regional shopping centres. After the acquisition CSC would own 14 UK shopping centres, including ten of the top 25 and four of the top six out-of-town centres.
The group said the Trafford Centre’s property assets were being externally valued as of 1 November and were expected to show a valuation of £1.65bn. This would represent a net initial yield of 5.01% and a nominal equivalent yield of 5.58%. “The implied acquisition price would represent a 3% discount to this external valuation,” CSC pointed out.
Meanwhile, the Financial Times also reports today that JP Morgan is poised to ditch plans to build a European headquarters in the Docklands and is getting ready to move into the former Lehman Brothers building at Canary Wharf instead. The paper says JP Morgan paid the Canary Wharf Group £237m in 2008 for a 999-year lease on the Riverside South site, and that it might try to reclaim some of this sum by selling its interest in the site back to Canary Wharf Group. The Lehman building includes purpose-built trading floors and would only need minor refurbishment before another bank moved in, the FT notes.
