TIAA-CREF acquires UK shopping centre

The New York-based retirement fund has purchased the 1 million-square-foot Festival Place Shopping Centre in Basingstoke from Grosvenor Fund Management for £280 million.

The Teachers Insurance and Annuity Association and College Retirement Equities Fund (TIAA-CREF) has acquired a UK shopping centre from Grosvenor Fund Management. 

According to TIAA-CREF and Grosvenor, the New York-based retirement fund purchased Festival Place Shopping Centre in Basingstoke. Although both parties declined to disclose the acquisition price, Reuters is reporting that TIAA-CREF purchased the 1 million-square-foot asset from Grosvenor’s Festival Place Fund for £280 million (€353.3 million, $446.3 million).

The Festival Place Fund was established in 1999 to manage Festival Place, according to the London-based real estate firm’s website. The shopping centre was redeveloped by Grosvenor in 2002, and the fund currently is fully invested. 

The shopping centre currently has approximately 175 shops and a 2,770-space, multi-story car park. It is the dominant retail property in Hampshire and is anchored by Debenhams, Marks and Spencer and a 10-screen Vue Cinema. Other retailers include Apple, Zara, H&M, Next, River Island, Superdry, Top Shop/Top Man and BHS.

Anthony Butler, director of real estate investment management at TIAA-CREF Asset Management UK, said in a statement: “Festival Place fits with our long-term strategy to invest in high-quality, regionally dominant shopping centres.” He added that the retirement fund is looking forward “to working with the local council and community to improve Festival Place for customers and retailers alike.” 

Tony Christie, head of retail at Grosvenor Fund Management, added: “The sale of Festival Place to TIAA-CREF reflects the winding down of Grosvenor Festival Place Fund, which soon comes to the end of its life. We now will be looking to reinvest Grosvenor’s share of the sale proceeds back into the UK retail sector.”

As of March, TIAA-CREF owns more than $18 billion of properties in the office, retail, industrial and multifamily sectors across the US, Canada and Western Europe. TIAA-CREF Asset Management UK is TIAA-CREF’s London-based European real estate asset management subsidiary.