Hammerson and Standard Life Investments are reviewing options for the future of their £1bn Brent Cross Shopping Centre, NW4, which is likely to see them bring in a funding partner for its redevelopment.
The duo have lined up Morgan Stanley to find a partner to facilitate the 969,000 sq ft expansion, which is expected to cost between £475m and £550m and will more than double the size of the existing 900,000 sq ft mall.
Any prospective new structure will be highly complex and there are numerous options. Market sources suggested that it is likely that a new partner will take on a 25%-50% stake in the overall project in exchange for an investment of around £500m. It is currently owned 41% by Hammerson and 59% by Standard Life’s Shopping Centre Trust.
Brent Cross is a key strategic project for both Standard Life Investments and Hammerson and the two parties are committed long-term to the project and may commit further capital to the scheme.
The process is set to unlock one of the most strategically important and valuable developments in the UK.
It will also serve as a litmus test for the health of the shopping centre development market, which has suffered since the downturn and most recently has been battling against rising construction costs. However, such deals were shown to be possible when last month Dutch pension fund APG took a 75% stake in TH Real Estate’s £1bn St James project in Edinburgh.
Hammerson and Standard Life Investments are currently working on detailed designs for the planning application for the project and are aiming to start on site in spring next year. They are targeting bringing in a funding partner by the end of the first quarter of next year.
The most recent mall plans for Brent Cross have just gone through public consultation. Plans include more than 200 shops, 40 restaurants, a cinema and a hotel. John Lewis and Fenwick will be retained as anchor tenants and there will be a new shop built for Marks & Spencer. All three were part of the original Brent Cross when it opened in 1976.
The venture was first granted outline planning permission for the project in 2010, which forms part of a wider £4bn masterplan for the area to build a new town centre called the Brent Cross Cricklewood scheme.
In addition to the redevelopment of the shopping centre, plans include 7,500 homes, three rebuilt schools, new parks and community facilities, an additional Thameslink train station as well as major road and public transport improvements.
In July 2014 revised planning permission was granted to separate the scheme between the north and the south of the A406.
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