Strategic outcome delivered for owners of former department store; Green & Partners’ cross-team solution benefits landlords, occupiers and local stakeholders in Lincoln
Prior to the administration of British Homes Stores (BHS) and its eventual collapse in April 2016, Green & Partners were instructed to consider suitable alternative occupier demand on behalf of their client as part of their strategic objective to reduce their exposure to department stores. To achieve the best results, the ideal solution was to secure new tenants for the stores and once in place, use our market knowledge to dispose of the assets at the best possible price.
For the 33,568 sq ft element of our client’s ownership of the BHS store on Lincoln High Street, this involved researching and considering suitable alternative demand for the whole premises whilst also reviewing various subdivision options. Our agency and investment teams worked together to review all solutions and opportunities, whilst also having regard to the site’s split ownership. Negotiating was therefore co-ordinated via three parties.
The store has a considerable prime frontage of 21m on the central section of Lincoln’s High Street and demand from occupiers was strong as a split but also as a whole. Using their local Lincoln market knowledge, our agency team delivered a letting to Boots for the entire store, relocating them from their existing store on Lincoln High Street to create the first of 24 planned ‘flagship’ Boots beauty stores in the UK.
The agency team were able to present a range of deliverable options on a subdivision of the unit, compared against a letting of the whole to a single occupier, allowing the client to fully appraise all options. A flagship letting of the entire premises to a single tenant avoided expensive subdivision costs for the landlords and securing a tenant with an excellent financial covenant on a new 15-year FR&I lease, added value for all involved. Local stakeholders were particularly pleased with the new Boots store which opened in April 2019 creating 15 new jobs and filling a large vacancy on the main shopping thoroughfare.
Following the successful Boots letting, our investment team set out to achieve the best price for the store on behalf of the landlords and we recently completed the sale of the premises to a private overseas investor. Our client considered this a strategic disposal and was delighted with the price achieved and the cross-team service we provided.
DEPARTMENT STORE SECTOR
Since the demise of BHS in 2016, the department store sector has seen unprecedented and much publicised challenges, with many disappearing from our town centres and high streets, leaving a greater number of large-scale premises unoccupied.
With the growth of online shopping and the impact of the COVID-19 pandemic, the pool of major retail brands able to consider occupying such large space has retracted further. These premises are often hindered by challenging floorplates and building fabric issues such as expensive asbestos removal and require creative solutions and careful consideration when devising their short- and long-term viability.
Our experience in the sector is supported by having successfully disposed either by way of letting or sales of a number of former BHS stores since 2016 and we are extremely well versed in working alongside consultants from alternative disciplines to deliver the optimum outcome for owners of large space.
Our agency team are currently advising on the repurposing of 10 department stores across England and have been really encouraged by the levels of demand seen from a variety of sectors. In the main, these levels of demand have been sustained throughout the turbulence created by the national lockdowns, reflecting our view that well located and dominant retail assets very much form a key part of the future vitality of our town centres.
Contact us to discuss any former department stores / MSUs that need an experienced and strategic team.
Get in touch with Matt Beardall, Adam Bindman, Mike Willoughby or Rowen Grandison.