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Whilst for some shopping centre landlords the collapse into administration, and subsequent winding-up, of the 124-outlet Debenhams department store chain raises unhappy questions, for at least one — the owner of its 466K SF Manchester store — it amounts to a release.
The news, which sees the loss of 12,000 jobs, clears the path to the redevelopment of a sorely underutilised but prominent city centre site.
A sense of exasperation with its tenant was never far below the surface of the descriptions used by advisers to German landlord AM Alpha.
The two administrations into which Debenhams fell in 2019 and April 2020, and the resulting company voluntary arrangement, have tested the landlord's patience.
"This is not a financially sustainable position for the landlord moving forwards, with a low and variable income stream being generated by a tenant in administration, which could cease trading at any point," a document submitted as part of a current planning application said.
The German investor bought the building in 2017, paying £89M and inheriting a Debenhams lease until 2039.
Currently Debenhams occupies the first four floors including a 42K SF basement, with floors five, six and seven vacant.
AM Alpha has proposed a redevelopment including a four-storey extension to add 40K SF of leisure space, 27K SF of restaurant and bar space, and 298K SF of offices aimed at the tech, media and telecoms sector on which the city council believes the city centre's future depends.
JD Sports and Next have been tipped as potentially interested in some former Debenhams units but they would not appear to fit well with the intended tenant mix in the former Manchester store, where the ground floor emphasis is on grab-and-go food and coffee, and the basement identified for potential leisure use.
CBRE, which is advising on the redevelopment, declined to comment on how the Debenhams administration would affect the future of the Manchester site. OBI, advising on the office element, did not respond to a request to comment.
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