Shopping Centre Investment
Client
Legal & General IM
Client Industry
Investment Management
Services Provided
Location
Size/Value
£61.40M
Divison Involved
Date
Challenge
In August 2022, Legal & General Investment Management (LGIM) instructed Savills to dispose of their interests in The Grafton.
Since LGIM’s acquisition of The Grafton in 2015, the key retailing pitch has shifted; as a result, the occupational strength and income profile of the asset have declined. The Savills Retail Investment team were therefore tasked with a comprehensive exploration of the asset’s alternative use value in order to maximise net receipt at the point of sale.
Solution
The Savills Retail Investment team reviewed the opportunity presented by The Grafton alongside planning policy, feasibility studies and advice from specialists across the business, most pertinently Life Sciences. The lack of available stock and overwhelming demand for laboratory accommodation within Cambridge guided the focus of proposed alternative uses. The Grafton therefore presenting a rare opportunity to introduce accommodation to serve this demand in a 12-acre city centre location.
Proposed areas from feasibility studies were adopted within the marketing collateral and with input from planning, development and occupational agents, Savills provided appraisal inputs and estimated Gross Development Values to the investor market.
As part of the marketing process, the Savills Retail Investment team hosted presentations to over 25 parties, which included an innovative interactive tour of the site using Matterport technology.
Calling for bids in June 2022, multiple bids were received. Following advice based on pricing and suggested timescales, in line with LGIM’s key objectives of this disposal, Savills called for a second round of bids, narrowing the options to two reputable parties.
Results
The transaction successfully completed in August 2022 at a price of £61,400,000, reflecting a NIY of 1.70%.
The acquisition reflected the site’s major redevelopment potential as a chance to tap into the city’s world-leading life science sector as part of an up-to-£300 million mixed-use project.
The sale of The Grafton was a key transaction within the 2022 shopping centre investment market and sits in the top five sales by achieved capital value during last year. The disposal illustrates sale how premium value can be unlocked in the positioning of retail assets.