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Revealed: Another Private Equity-Owned Shopping Centre Goes Into Administration

The St George's shopping centre in Preston.

A shopping centre owned by private equity firm InfraRed Capital Partners, once valued at £73M, has gone into administration after the loan secured against it matured, Bisnow can reveal.

Partners from EY were appointed administrators to a group of companies that own the 280K SF St George’s shopping centre in Preston in the north west. 

As the impact of the coronavirus continues to hit the retail sector hard, the flow of shopping centres going into administration and receivership is increasing quickly. 

Nine shopping centres or leisure-led schemes have gone into administration in the past four months, as lenders take control of struggling assets or owners hand back the keys. In June, Intu, the UK’s largest shopping centre owner, went into administration, handing control of its assets to its lenders.

InfraRed Capital bought the St George’s centre for its Active Fund III from Aviva for £73M in February 2015. The fund manager bought several shopping centres between 2011 and 2015, most of which it then sold on. 

Documents at Companies House show that Wells Fargo provided a loan to fund the purchase. 

Accounts for one of the companies in the centre’s ownership structure show the loan matured in March but was not repaid. The accounts said that loan-to-value and interest-cover-ratio covenants were likely to be breached and that the lender was controlling the bank account into which rent was being paid by tenants.

As a result of lockdown closures, rental income had fallen significantly, the accounts said. 

InfraRed and EY did not respond to requests for comment. Wells Fargo declined to comment.