The Trafford Centre was last valued publicly by Intu at close to £1.7b, but is expected by analysts to be sold for at least 20% less.
The Trafford Centre, Britain’s fourth-biggest shopping centre, is being put up for sale less than two months after its parent company, Intu Properties, collapsed into administration. Like other retailers and shopping centres across the UK, the centre has been hit hard by the impact of coronavirus on the retail industry. Retailers including Debenhams, Cath Kidston and Laura Ashley have fallen into administration, with numerous others turning to their creditors to secure approval for rescue deals.
The Manchester shopping centre, which draws 30m visitors every year, is to be auctioned following pressure for a rapid sale from its biggest lender. Sources have revealed that the board of the entity which controls the Trafford Centre has appointed investment bank, PJT Partners and the property agent CBRE to market the site.
The Trafford Centre was last valued publicly by Intu at close to £1.7b, but is expected by analysts to be sold for at least 20% less if a buyer can be found.
CPPIB, one of the world’s largest pension funds, had been reported to want a quick sale of the Manchester site, but was met by opposition from the holders of £690m of mortgage-backed bonds secured against the centre.
The appointment of advisers to begin a formal sale process is expected to attract the interest of John Whittaker, who sold the Trafford Centre to Intu back in 2011. His company, Peel Holdings, recently relocated its head office from the Trafford Centre.
Intu is a key player in many of the regional economies in which it operates. At the point of KPMG’s appointment, it directly employed nearly 3000 people, with a further 102,000 working in its UK shopping centres. An additional 30,000 people are employed in its supply chain.
KPMG, the administrator, has secured funding to continue managing Intu’s portfolio of sites for a six-month period.
The auction process will provide a crucial test of investors’ appetite to buy flagship retail destinations at a time when visitor footfall has been impacted by the Covid-19 crisis.