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EXCLUSIVE: Shopping Centre Earmarked For Redevelopment Into 2,800 Homes Goes Into Administration

The Eastgate Shopping Centre in Basildon, Essex

The companies that own a shopping centre with planning permission for conversion to up to 2,800 homes, many of them built for rent, has gone into administration, Bisnow can reveal. 

Partners from FTI Consulting have been appointed administrators to a pair of special purpose vehicles that own the Eastgate Shopping Centre in Basildon, Essex, 30 miles to the east of London.

The 750K SF, 100-unit centre was ultimately owned by a fund set up by InfraRed Capital Partners. Planning permission was granted in April by the local council for the complete redevelopment of the scheme and construction of several new residential towers consisting of homes built for rent and for sale, with retail and leisure space on the ground floor. 

The scheme was set to be developed over three phases and was being managed by Sovereign Centros.

“The development is the latest in a trend of shopping centre owners turning to resi and in particular BTR, with institutional capital hunting out opportunities in well-connected city centre locations,” Sovereign Centros said when planning was submitted in September 2020. 

InfraRed bought the centre from British Land in January 2014 for £89M. A £56M loan from German bank BayernLB was used to finance the acquisition, and Companies House records show the loan has not been repaid. 

FTI said in a statement that the centre will remain open and its operation will not be affected by the administration. Asset manager Sovereign Centros and property manager Munroe K will remain in place, it said. 

“The challenges to UK retail are well known and have been further accentuated by the impact of Covid-19 and the resulting national lockdowns which have ultimately driven today’s appointment of joint administrators,” FTI said. 

It is the second shopping centre formerly owned by InfraRed to go into administration this year. In February, Bisnow revealed that partners from EY were appointed as administrators to companies that owned the 280K SF St George’s shopping centre in Preston, which InfraRed bought for £73M in 2015. In August it was bought by investor Adhan.

That same month InfraRed sold its real estate fund management division, which has been a successful investor in the logistics sector, to Singaporean company ARA Dunedin