Capital Shopping Centres’ move to acquire the Broadmarsh Centre in Nottingham is shrewd, given how difficult it is to build new malls in the UK.

The company, listed in Johannesburg and London, bought the centre from rival property fund Westfield and partner Possfund. The £73,3m (R923,6m) deal will provide a dominant foothold in one of the few underdeveloped retail nodes still left in the UK.

Capital Shopping Centres, part of what was formerly Liberty International, already owns Nottingham’s 98100m² Victoria Centre. The competing malls are the two biggest in the area, on opposite sides of the city, and neither has been extended or upgraded in the past 15 years.

“They were caught in something of a development deadlock, which has created a lot of pent-up demand from retailers,’’ says Capital Shopping Centres CE David Fischel. He intends to unlock the region’s growth potential with plans to add 54000m² to the Victoria Centre.

During a recent visit to SA, Fischel noted that in the 1990s the Victoria Centre was ranked as one of the UK’s top 10 shopping centres. It has since slipped to 32nd place despite Nottingham being the UK’s sixth-highest retail spending destination. Approval has also been granted for the addition of 100000m² to Broadmarsh’s existing 48700m²

Says Fischel: “The Broadmarsh deal has created a huge opportunity to unlock value for shareholders. It’s the most important transaction for Capital Shopping Centres since Manchester’s Trafford Centre was acquired in January.’’

The Broadmarsh acquisition brings the portfolio of Capital Shopping Centres to 15, with an asset value of around £7bn (R88,2bn). That places it as the UK’s biggest retail property owner by far.

The stock deserves a place in the portfolio of any serious SA investor, especially those looking for a solid rand hedge.

Though the share price has risen nearly 10% over the past three months, CSC is still trading at 13% below its May peak of around R46 and offers a sterling dividend yield of 4,2%.

Source: Financial Mail