LIVERPOOL’S Metquarter shopping centre has been sold for just £21m – less than a quarter of what it was worth before the recession.
The centre has been bought by the London-based Columbus UK Real Estate Fund for £21m from the Irish Bank Resolution Corporation (IBRC). The IBRC was set up to sell off distressed assets for recession-hit Irish banks.
Alanis Capital and Anglo Irish Bank Private Banking had bought the centre in 2007, a year after it opened, for £90m.
Metquarter tenants include Gieves & Hawkes, LK Bennett and Patisserie Valerie.
Joe Froud, managing partner of Columbus Capital Management, said : “Liverpool is a strong retail city but the delivery of Liverpool One, coinciding as it did with the recession, created conditions that weakened The Met Quarter.
“Now that Liverpool One is established and fully let we are confident that our repositioning strategy, together with significant financing to deliver it, will reestablish the Met Quarter as the city’s premium retail destination.”
Columbus, part of London investment house Schroders, secured a new debt facility from Royal Bank of Scotland to fund the deal.
Suzanne Avery, managing director for real estate and sustainability, Royal Bank of Scotland Real Estate said: “We have known the Columbus Management Team for many years and are delighted to assist them on this acquisition.
“Liverpool is a strong retail centre and Joe and his team have the experience to successfully reposition the asset and capitalise on this opportunity.”
Charles Hubbard, an agent with Matthews & Goodman, originally worked on Metquarter when it was first built and then subsequently sold.
While working for another commercial agency, Edmund Kirby, he represented Bill Davies, the Liverpool property developer who originally owned and tried to develop the site.
Mr Hubbard helped broker the deal to sell the site to entrepreneur John Milligan who built and opened the Metquarter.
It was sold for £85m in 2007 on a net initial yield (annual rental income as a percentage of capital value) of 4.28%.
Mr Hubbard said: “The annual rental income at that time was just over £4m. It opened a couple of years before Liverpool One and at first it did very well.
“But of course when it changed hands in 2007 that was just before the financial bubble burst. Liverpool One opened in 2008 and the whole retail trading environment became much more difficult.”
Metquarter’s current rental income is not published but Mr Hubbard estimates that it could have dropped as low as £2m.
He added: “If it has changed hands for £21m then that could represent a net initial yield of around 8%. That is really good news because it will allow the new owner to be much more pro-active in developing it.
“I am delighted to hear about the sale because I think it is a lovely building and it is still quite popular and I am optimistic that it can still do very well.”