Frogmore, the London-based real estate investment manager, has acquired the Stratford Shopping Centre for £141.5 million ($177 million; €166 million).
The investment manager bought the shopping center, situated next to London’s Olympic Park, from a joint venture between New York-based private equity real estate giant Blackstone and London-based private equity real estate firm Catalyst Capital.
Blackstone and Catalyst bought the asset for £91.5 million back in 2010, two years before the London Olympic Games, from Land Securities, the UK’s largest commercial property owner.
The 306,000 square foot retail asset is almost fully let and produces annual gross rental income of £8.2 million, with key tenants including Sainsbury’s, Lidl, Boots, Sports Direct and JD Sport. The property also includes 113,000 square feet of vacant offices as well as planning consent for an additional 540,000 square feet of residential space which, when combined, would treble the asset’s total square footage.
The shopping center also benefits from a large catchment area which has steadily increased since the 2012 Olympics. Stratford is already the 10th busiest railway station in the country and the 7th busiest underground station with around 61.5 million passengers passing through annually.
The center is located in Newham, London’s fourth largest borough by population. The borough has seen massive regeneration following the opening of the Queen Elizabeth Olympic Park and the Westfield Stratford City Shopping Centre.
Patrick Smith, Frogmore’s director of acquisitions, said: “Stratford Shopping Centre is virtually fully let and benefits from an existing footfall of 26.5 million people. Our value add strategy will be to capitalize on the huge footfall and increase dwell times by improving tenant mix within the scheme.”
“The Stratford area’s continued regeneration is an important consideration for us and the arrival of (the major railway development) Crossrail in 2019 will boost connectivity and values. The planning permission gives us a good guide as to the potential of the site and we look forward to working with Newham and other local stakeholders to unlock a viable and comprehensive solution,” Smith added.
Frogmore’s chief executive officer Jo Allen added that the deal marked the firm’s 330th transaction since the formed was formed under the stewardship of herself, Smith and chairman Paul White.
For the Stratford deal, Frogmore was advised by JLL and Catalyst was advised by Savills.