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There has been very little movement in the UK shopping centre investment market for the past few years: Even before Covid, malls were at the bottom of property investors’ shopping lists.
But a consortium has just shelled out a nine-figure sum to buy debt secured against a portfolio of 15 shopping centres across the UK, betting that it can help the current owners to increase the value or take control of the assets and sell them at a profit.
Attestor Capital and Octane Capital Partners have teamed up with asset manager Ellandi to buy the portfolio of nonperforming loans with a face value of about £375M from UK bank NatWest. React News previously reported that the portfolio was likely to be sold for about 40p to 50p on the pound, which would put the amount paid at around £140M to £190M.
Attestor is a European private equity investor that has invested in the car rental and aviation businesses, and in 2019 began to invest in property with the purchase of an office building in Amsterdam.
Octane Capital is a development finance and bridge loan specialist with a background in residential development.
The portfolio sold by NatWest includes debt secured against some well-known UK shopping centres owned by some of the biggest names in the sector. They includes the Highcross Centre in Leicester, owned by Hammerson; and Cribbs Causeway in Bristol, owned by M&G and the administrators to Intu.
The strategy for buyers of nonperforming loans is to try to get existing owners of the underlying assets to refinance and repay the debt they owe at face value, or to take control of assets and sell them, hoping that the price they sell for is higher than the level of the debt secured against them.
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