Partner Article

London property developer in £19.2 million acquisition with Morrisons at Killingworth Shopping Centre

London-based property developer Development Securities today announces that it has acquired the non-foodstore element of The Killingworth Centre, a convenience retail shopping centre near Newcastle from Wm Morrison Supermarkets plc for £19.2 million at an 8.27% net initial yield.

Completed in 2000, The Killingworth Centre is the principal retail destination within Killingworth, a suburban commuter town 5 miles from Newcastle City Centre.

The covered shopping centre is the principal retail and leisure destination for the local community, comprising a 73,000 sq. ft. Morrisons foodstore, a 70,000 sq. ft. Matalan and 28 further retail units totalling 106,000 sq. ft. which are let to a range of national and local operators including Poundworld, Wilkinson, Card Factory and Boots.

The Morrisons foodstore will remain outside of Development Securities’ ownership. The shopping centre is currently fully occupied with a weighted average unexpired lease term of 5.1 years and offers a number of asset management opportunities.

Development Securities PLC, Matthew Weiner, said: “The Killingworth Centre is a popular and well-located shopping centre that dominates Killingworth’s retail provision meeting all the modern day requirements of the convenience-focussed consumer.

“This high-yielding asset has a stable occupier base and strong footfall which is driven by the Morrisons foodstore, one of the best performing stores within their portfolio and which will remain outside of our ownership.

“Further to our acquisition of Chill Factore earlier this month, we have now reinvested all of the proceeds from the investment assets that were sold over the past year, recycling the capital into high yielding investment properties with stable income streams and which are better positioned to benefit from structural changes in the retail market.

“Our focus remains on convenience retail schemes and alternative assets where we can proactively drive value through asset management and enhancement initiatives.”

Development Securities was advised by Prime Retail, who have been retained as letting agent; Morrisons was represented by Cushman & Wakefield.

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