Redical Emerges As £280M Front-Runner For Merry Hill Shopping Centre
Specialist retail investor Redical is the preferred party to acquire the 1.4M SF Merry Hill shopping centre for around £280M, according to Green Street News.
The retail real estate investor and operator appears to have seen off rival bidders, including acquisitive multibrand retailer Frasers Group, Ingka Centres and a consortium led by Irish developer Eamonn Duignan, to acquire the popular West Midlands mall.
Merry Hill is the ninth-largest shopping centre in the UK, with more than 200 stores, and is anchored by Primark, a revamped Marks & Spencer due to be unveiled on 19 November, and Harvey Norman stores, with an annual footfall of around 20 million.
Merry Hill recently announced nearly 20K SF of new signings and reinvestments, including a new 750 SF store for jewellery brand Lovisa, an upsized 6K SF Goldsmiths showroom, plus a new 2,400 SF store from Chinese retailer Miniso.
Also joining Merry Hill is Select Apple, an official Apple partner, with a 2,800 SF store, a newly opened 3,100 SF Flying Tiger, a 5,900 SF Savers store, and a relocated and expanded Hotel Chocolat outlet.
Over the years, Merry Hill has changed hands multiple times. Local brothers Don and Roy Richardson completed the development's first phase in 1985 and subsequently sold to Mountleigh in 1990. But the company ran into financial trouble, and Chelsfield took over in the early 1990s, later partnering with Westfield, which then sold a 50% stake to Queensland Investment Corporation.
Intu Properties bought Westfield's holding in 2014 and QIC's in 2016, only to enter administration in 2020. The current owners of the Brierley Hill mall include Wells Fargo and AXA Investment Managers, and CBRE’s Sovereign Centros took over asset management in 2022.
The centre had £436M of debt secured against it before the administration and has undergone a £125M investment and expansion programme.
Knight Frank ran the bidding process, and the strength of interest has pushed the likely selling price past the £270M it was initially being guided at.
Redical was co-founded by Mikko Syrjanen and Petteri Barman, formerly co-heads of real assets at Man Group, in 2021. Its assets total almost 1.2M SF of retail, food and beverage, and leisure, including The Liberty, Romford, Victoria Gate and Victoria Quarter in Leeds, and Clayton Square in Liverpool.
The business focuses on countercyclical investments and prime assets with income, and the acquisition of Merry Hill would be the group’s largest to date.
The potential deal comes following an upbeat take on investor sentiment toward retail and shopping centres at the 30th MAPIC edition in Cannes at the start of November.
