A recent rent review arbitration between Standard Life Investments and Homebase regarding Homebase's unit at the Ladymead Retail Park in Guildford has had the side effect of setting a new record rent in DIY retail of £35 per sq ft, beating the previous mark of £27.50. This is likely to be a one-off though, as rents generally in this market have stagnated over the last couple of years owing to a lack of demand. Ladymead is an exceptional case though, being the only retail park in the area and having open A1 consent. Property Week highlights that some retailers, including B&Q and Sainsbury's, have begun to buy in leases where rent reviews are due. B&Q has also embarked on a remodelling programme at several of its stores to downsize and sub-let to other retailers.
August 2007 Archives
Two prominent mixed-use developments in Birmingham had significant pieces of news over the last week. The Birmingham Alliance, comprising Land Securities, Hammerson and Henderson, is set to sign a development agreement with the council for the £600 million Martineau Galleries scheme. The council has been looking for a development partner since 1998 for the scheme, which will comprise 2.9 million sq ft of mixed-use development linking the Bullring shopping centre to the Eastside regeneration zone.
Pub sector update: Mitchells & Butlers confirmed yesterday that plans for a £4.5 billion property joint venture have been suspended. The pub company has been in talks with financiers to finance a 50:50 joint venture with Robert Tchenguiz's R20 investment vehicle, involving approximately 1,300 pubs and £240 million of rent. City analysts had previously been skeptical about the likelihood of such an arrangement, as I mentioned in an earlier post. The company said: "The Board believes that it is now not possible to execute the joint venture due to the current disruption of the debt markets which has resulted in a significant widening of credit spreads." Nils Pratley details the context and potential pitfalls here.