Aviva, the Richardson family and McArthurGlen are close to securing a deal to forward fund a £120m designer outlet village development in the Midlands.
The forward-funding deal for the Mill Green Designer Outlet Village in Cannock, Staffordshire, has been struck with the scheme’s previous owner, U+I, following a circa £20m site purchase.
McArthurGlen will act as owner and operator of the 278,000 sq ft development, which will include 130 designer outlet shops, restaurants and 2,000 car parking spaces.
The site is situated next to the Mill Green Nature Reserve, close to the M6 motorway. McArthurGlen is thought to be reviewing the number of units in the development. A second phase is also being mooted by the new owners, to follow on from the first phase when completed in late 2019.
The scheme won consent in November 2015 and plans were given the green light by Secretary of State Greg Clarke in January 2016. Work will start on phase one in Q1 2018.
The deal comes as the UK’s robust designer outlet sector continues to enjoy double-digit growth. While high-street fashion has struggled in the face of e-retail, outlet sales have risen by almost 90% since 2008 to £3.4bn.
Outlet villages have also proved a favourite for investors during political uncertainty. Land Securities is buying three designer outlet villages from Hermes Asset Management for £340m in one of the largest retail investment deals this year.
McArthurGlen was originally a US company brought to Europe in the 1980s by developer Joey Kaempfer. The company has 24 designer outlets across Europe and one in Vancouver, Canada. It also has seven in the UK, including Ashford in Kent, York and South Normanton in Derbyshire.
Former owner U+I remains an investor in the Cannock project alongside development partner Rioja Developments.
U+I declined to comment.
