Sports Direct boss Mike Ashley is preparing to purchase his latest cut-price bargain – a retail park just outside of London.
The retail tycoon has put the 90,000 sq ft Brookfield shopping park in Cheshunt, Hertfordshire, under offer for around £28m – a circa 38% reduction on the asking price of around £45m, and just a third of the price vendor JP Morgan Asset Management paid for the park in 2015.
JP Morgan was encouraged to sell the retail park by its lender RBS, which financed the original acquisition with a £62.2m loan. The debt has since reduced to around £45m. It is not clear whether RBS would need to write off the debt if the deal proceeds.
Ashley’s potential acquisition of the park comes amid a buying spree for the businessman, who has been heavily criticised by shareholders for buying numerous struggling high street retailers, including House of Fraser – a deal he has since described as “nothing short of terminal” – Evans Cycles, Jack Wills, Flannels and Agent Provocateur.
Ashley has acquired retail parks before and used them to open Sports Direct-owned brands. With three of the 12 units at Brookfield currently vacant – a further unit leased to Arcadia’s Outfit is under CVA, with its lease expiring in 2020 –it is considered likely he will do the same at Cheshunt, to increase its value and income profile.
At the retailer’s AGM in central London earlier this week, Ashley was re-elected to its board after gaining 90.99% of the shareholder vote – but admitted to media outlets that shareholders who voted against him “had a point”.
Sports Direct continues to face pressure while it struggles to integrate House of Fraser with the rest of its business – on top of a €674m (£605m) tax demand from Belgian authorities to deal with. The retailer still lacked an auditor at the time of writing.
The news comes as values in the retail park sector continue to slump. Values among prime retail parks have dropped by some 15%, with a dive in secondary parks of at least 30%, according to estimates from Knight Frank.
Avison Young is advising JP Morgan; CBRE is acting for Mike Ashley.
All parties declined to comment. Sports Direct did not respond to requests for comment.
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