An entire shopping centre has been snapped up for as little as the price of a house .
Wilko going bust did little to boost the value of Kingsway Shopping Centre in Newport, South Wales but it’s still home to a Sainsbury’s and Starbucks . Apparently, though, such heavy hitter brands aren’t enough to make it any more attractive to own than £615,000 – less than a detached four-bed on the market just down the road in Caerleon.
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In May the shopping centre was put into property receivership and in August liquidators were appointed to Kingsway Investments (Newport) LLP, which operates the centre and owns its leasehold. It’s now been sold to an unnamed buyer for a staggering £385,000 below its guide price.
According to WalesOnline , the shopping centre’s leasehold owners were placed into liquidation due to financial difficulties earlier this year. It is hoped the purchase, which includes Sovereign House at Commercial Street, could secure the centre’s long-term future for Newport which has struggled to become a major shopping attraction in the region.
The centre currently provides space for 36 retail units, many of which are vacant, as well as office space, a gym, and a car park. The gross contracted income in rent from the shopping centre as of this month was £1,186,682.
According to Newport-based commercial property expert Dan Smith, of M4 Property Consultants, the secret to the centre’s future success could be to fill the units with more varied tenants. He cited nearby Newport Arcade as an example of a shopping area now thriving with a mix of tenants. Newport Arcade includes a florist, a coffee shop, an art gallery, and a skater store.
Jemma McAndrew, receiver and partner at Cushman & Wakefield, told WalesOnline the difficulties for the Kingsway “reflected changes that occurred in the retail sector over the past few years”. “By nature of the retail environment at the moment running shopping centres and enticing tenants requires a significant injection of capital,” she said. “Any new owner is going to need the cooperation of the council in respect of a grace period on the head rent in some shape or form. The asset’s income profile will be challenged even more with Wilko leaving.”
A spokesman for the council has said it will “work with any new developer to ensure ongoing viability” and has “offered a range of business rate relief to retailers in the city centre and will work with any developers to ensure ongoing viability”.