Insurance giant Legal & General is poised to snap up Dundee’s Overgate shopping centre in a sale which could be worth up to £125m.
The Courier understands the group is in prime position to tie up a deal in the coming weeks but is not the only party interested in the 60-unit centre.
The centre was discretely put on the market by owner Land Securities in October, with an asking price around £15m lower than the £140m it paid for the site in late 2010.
Its sale continues a strategy which has seen the UK’s largest property firm release capital from its investments to pursue new growth.
“Land Securities confirms that it has commenced marketing the Overgate Centre, Dundee, in preparation for a possible sale in line with the company’s strategy of recycling capital,” a spokeswoman said.
“Since purchasing Overgate almost three years ago, we have delivered significant improvements across all areas, from the retail offering to the shopping environment. The centre continues to be the dominant retail offering in Dundee and it has a great tenant mix.
“Overgate is an excellent retail opportunity for an owner to take the asset to the next level.”
The company said it “remains dedicated” to Dundee, and highlighted plans to refresh the Kingsway West Retail Park including a new showcase Next Home store.
It has previously outlined options for limited “asset management” extensions to the rear of the building, but has held off on plans for a major “phase two” development scheme including cinema and leisure facilities to extend the centre along the West Marketgait.
Legal & General refused to comment on the potential for an agreement to be reached yesterday (THU). It’s thought the group’s property investment arm has been attracted by a likely rental yield of around 7%, and is prepared to pay a sum in the region of Land Securities’ asking price.
The move is just the latest step taken by Land Securities, which specialises in London office accommodation and shopping centre investments, to reduce its exposure to Scotland.
It recently sold its 50% stake in Aberdeen’s Bon Accord and St Nicholas shopping centres to investment trust F&C, with receipts of £189m shared between the listed firm and co-owner British Land.
| The news came as new statistics from the Office for National Statistics revealed shoppers continued to rein in spending last month.
New figures showed another subdued month for Britain’s retailers, with November’s sales volumes rising 0.3% on the previous month. October had seen a 0.9% slump.
There were mixed performances from different store types in the run up to Christmas, as a better month for clothing shops was offset by weakness in department stores and petrol stations.
A record 11.9% of all sales were made online during the month, with feedback from department stores suggesting that investment in their internet sites had boosted sales at the expense of store business.