A private Lancashire property business has acquired Preston’s St George’s shopping centre from IRAF UK Dragon, as local investors and bargain hunters pick over private equity’s failed bets on UK shopping centre retail.

The £25M sale price for the 270K SF centre is substantially down on the £73M paid by IRAF UK Dragon in 2015.

St George’s fell into administration in February, one of a long list of UK malls trapped by the coronavirus pandemic’s acceleration of the long-standing collapse of retail values.

Companies House paperwork revealed a Wells Fargo loan backing IRAF parent Infrared's purchase. The loan’s maturation prompted the administration of a group of companies that owned the centre, as Bisnow reported. EY partners were appointed.

The 1960s Preston centre joins a small but growing list of shopping centres in the portfolio of Blackburn-based Adhan Group, controlled by Salim Patel and family.

Adhan said it aims to expand through the purchase of shopping centres, retail parks and sizable retail assets with a target of creating an asset value of £1B by 2023.

Adhan said it will be “investing significantly” in the Preston Centre where tenants include H&M, River Island, Marks and Spencer, Superdrug, Foot Asylum and Matalan.

The group said it also owns and manages more than 5M SF of industrial floorspace and has a land bank of 60 acres available for industrial, retail and residential development.

“We identified it as an important strategic acquisition earlier in the year," Adhan Chief Executive Salim Patel said. "It’s a very strong retail offering in a city which is undergoing a significant programme of redevelopment and investment, with the city council investing heavily in the Harris Quarter, Stoneygate and Friargate. We envisage the Centre cementing its position in the heart of Preston for many years to come.”

Earlier Adhan buys include the 80K SF Cavern Walks, Liverpool, acquired at auction in 2013 for £4.1M, and victim of an earlier phase of the retail rout. The boutique centre has remained largely empty for most of its life, and it was sold in 2018.

The business also owns high street centres in Blackburn and Darwen, both in Lancashire.

Knight Frank acted for the vendors and Savills acted for Adhan Group.