The shopping center Blackburn was bought by the Adhan Group of Companies in a deal worth £40 million.
Capital & Regional, the UK’s convenience and community-oriented shopping center REIT, has announced that it has swapped contracts for the sale of The Mall, Blackburn to the retail arm of the Adhan Group of companies for 40 million pounds sterling in cash.
The finalization of the sale, which is subject to the agreement of the local authorities in full ownership, should take place towards the end of June 2022.
The shopping centre, Blackburn would have contributed around £3.7 million to the group’s net rental income for the year to 30 December 2021.
The 600,000 square foot city center space had a December 2021 valuation of £38.2 million.
Bought in 2004 for £120million, The Mall Blackburn was transformed with a £66million development program in 2011 which upgraded the shopping centers and car park, creating an additional 104,000 square feet of retail space by retail.
It currently includes a Primark, Next and a Boots amongst a host of other stores including Blackburn Market.
Founded in 2003, The Adhan Group is based in Preston New Road, close to the city centre, and is one of the region’s leading commercial and industrial rental and sales companies.
In August last year, the company acquired St George’s shopping center in Preston for an undisclosed sum.
The 270,000 square foot St George’s was previously owned by IRAF UK Dragon Ltd, which entered administration earlier in the year.
Adhan Group CEO Salim Patel said: “Blackburn is a strategic acquisition in the continued growth of our retail arm of the Business. We are very proud to be the new owners and to purchase a main center in our local town.
“Having grown up in Blackburn and having family ties to the centre, we are looking to invest significantly in improving the retail offering and bringing in other users to enhance the experience within Blackburn.
“We are sure that, working alongside Blackburn With Darwen Council and their exciting plans for the redevelopment of the former Thwaites Brewery site, that we can achieve this goal and put Blackburn on the map as a true destination town.
“We are already in talks with six new retailers and plan to redevelop certain areas of the center to accommodate these new additions.”
Blackburn with new Darwen Council leader Councilor Phil Riley said: ‘We have known for a long time that The Mall Blackburn is for sale.
“It’s great news that it has been taken over by a local company.
“We look forward to working with the Adhan Group of Companies to develop the city center.”
Capital & Regional said net cash proceeds of around £39 million will be used to repay debt secured on the property under The Mall loan facility. The sale will reduce the Group’s Net Loan to Value (“LTV”) ratio by approximately 600 basis points.
The combination of this disposal, the expected residential inflow from Walthamstow and the discounted debt purchase on Hemel Hempstead would reduce the Group’s net LTV ratio, on a proforma basis, from 49%, in December 2021, to about 41%.
Lawrence Hutchings, managing director of Capital & Regional, said: “The sale of The Mall, Blackburn at a premium to its December 2021 valuation provides further evidence of stabilizing asset values as well as renewed investor confidence in the sector and allows us to further materially reduce the Group debt.
“With the debt restructuring and capital increase at the end of last year, the recent acquisition of Hemel Hempstead debt at a significant discount and the major lease commitments and loan modifications at Ilford, which we As we announced last week, this transaction represents another important step in restructuring the financial and operational position of the Group.
“These continued improvements give Capital & Regional a solid platform from which to look to continue executing our growth strategy and support our plans to resume dividend payments in the second half.
“I would like to thank the team at Blackburn Center for their hard work and dedication during their tenure with the Capital & Regional Group. We have been a big part of this vibrant, diverse and important community for over 20 years. , and we wish the community, our retailers and the local council continued their success as the center enters its next phase under new local ownership.”