Retail tycoon acquires Next building in capital
BILLIONAIRE retail entrepreneur Mike Ashley has acquired a prime building in the centre of Cardiff currently occupied by Next.
The serial entrepreneur, whose retail interests include House of Fraser, Sports Direct and Flannels, which all have a presence in Cardiff, has acquired the near 100,000sq ft building on Queen Street from an institutional fund.
The lease, which generates an annual rent of around £1.5m a year, expires in 2027. The property investment was put on the market with an asking price of around £15m.
Mr Ashley has acquired the building via Frasers Group. With Next in a strong trading position, Frasers Group could just look to take annual rental income until the lease expires. However, although Frasers Group wouldn’t divulge its thinking, there is potential for Mr Ashley to bring his retail businesses in the city – House of Fraser in the up for sale Howells building, Sports Direct and Flannels – under one roof.
If that was to happen, a deal would have to be done to secure a new prominent location for Next in the city centre. However, an option could be to relocate the retailer into the nearby St David’s shopping centre in the space left following the demise of the scheme’s biggest tenant, Debenhams.
Debenhams occupied 165,000 sq ft of space e in St David’s. The majority y of the Debenhams site, e, around 140,000 sq ft, is owned by property giant British Land, with the remainder coming under the joint venture of Land Securities and Intu through its joint ownership of St t David’s. Intu collapsed into administration last year. This has not impacted on the scheme, which is operaterated by Land Securities. .
A spokesperson for St David’s said: “Debenhams was a much-loved store in St David’s with a long history in the city. The store offers a fantastic space in a prime location and we have some exciting ideas for its future. In the meantime, shoppers ca can lookook for war do ad to amixoofn ewe brands opening at St David’s this summer, including the new flagship Zara store, Wales’ first standalone Breitling store, Morphe Cosmetics and Welsh independent Mallows Beauty.” British Land said: “We are considering our options for the site.” Getting the Debenhams space occupied by other retailers in its entirety, with the pandemic having accelerated the trend to online retail, will be a challenge.
A way forward is a mixed-use scheme. As well as providing new tolet retail space, the remainder could be offered for restaurants, a food hall, as well as potential for residential units that could be rented for shor short-term stays and even a hotel.
W While the Debenhams store is integ integrated into the wider St David’s sche scheme, with a shared roof and service access requirements, with inve investment and an innovative redesign it could have a future as a mixe mixed-use scheme, with any resident dential element providing useful footf footfall for St David’s.
A buyer for the Howells building, whic which is current partly occupied by Hou House of Fraser, has yet to be secu secured.
Pr Property advisory firm Avison Youn Young is marketing the Victorian liste listed building after the firm’s
Na Nathan Pask and Rosalind Goode were appointed joint fixed charged receivers in 2019. That followed the collapse of the company that owned the property, Jersey-based Wallace Properties, which was being financed by a German bank.
The building extends to 275,000 sq ft, located on a prime 1.72-acre site. A new owner could look to redevelop the building to provide a new mixeduse scheme, with space for retail, office and residential, as well as potentially a new hotel too.
That would require an investment potentially of tens of millions of pounds. It is understood that Avison Young was initially seeking offers for the building in the region of £15m.
However, while the sales process has attracted strong interest, the property is not yet under offer, with a number of bidders having decided not to proceed. House of Fraser is no longer tied into a long-term lease following the administration, which means, while paying less rent than previously, it could easily relocate.