The Mall Blackburn has been bought by the Adhan Group of Companies in a deal worth £ 40 million.
Capital & Regional, the UK convenience and community focused shopping center REIT announced it has exchanged contracts for the sale of The Mall, Blackburn to the retail arm of the Adhan Group of Companies for £ 40m in cash.
Completion of the sale, which is subject to local authority freeholder consent, is expected to take place around the end of June 2022.
The Mall, Blackburn is said to have contributed approximately £ 3.7 million to the group’s net rental income for the year ended 30 December 2021.
The 600,000 sq ft town center space had a December 2021 valuation of £ 38.2m.
Purchased in 2004 for £ 120m, The Mall Blackburn was transformed with a £ 66 million development scheme in 2011 which modernized the malls and car park, creating a further 104,000 square feet of retail space.
It currently includes a Primark, Next and a Boots among a whole host of other shops, including Blackburn Market.
Founded in 2003, The Adhan Group is based in Preston New Road, close to the town center, and is a one of the leading commercial and industrial lettings and sales companies in the region.
In August last year the company acquired Preston’s St George’s Shopping Center for an undisclosed sum.
The 270,000 sq ft St George’s, was previously owned by IRAF UK Dragon Ltd, which had entered into administration earlier in the same year.
CEO of the Adhan Group, Salim Patel, said, “Blackburn is a strategic acquisition in the ongoing growth of our retail arm of the business. We are very proud to be the new owners and to be purchasing a primary center in our local town.
“Having grown up in Blackburn and with family links to the center we are looking to invest substantially in improving the retail offering and bringing in alternate users to heighten the experience within Blackburn.
“We are sure that, working alongside Blackburn With Darwen Council and their exciting plans for the redevelopment of the former Thwaites Brewery site, that we can achieve this goal and put Blackburn on the map in terms of a true destination town.
“We are already in conversations with six new retailers and have plans to redevelop certain areas of the center to accommodate these new additions.”
Blackburn with Darwen Council’s new leader, Councilor Phil Riley, said: “We have known for while that The Mall Blackburn has been up for sale.
“It is great news that it has been bought by a local company.
“We look forward to working with the Adhan Group of Companies to grow the town center.”
Capital & Regional said the net cash proceeds of approximately £ 39m will be used to repay debt secured on the property as part of The Mall loan facility. The sale will reduce the Group’s Net Loan to Value (“LTV”) ratio by approximately 600 basis points.
A combination of this disposal, the anticipated Walthamstow residential receipt and the discounted purchase of debt on Hemel Hempstead would reduce the Group’s Net LTV ratio, on a proforma basis, from 49%, at December 2021, to approximately 41%.
Lawrence Hutchings, chief executive of Capital & Regional, said: “The sale of The Mall, Blackburn at a premium to its December 2021 valuation provides further evidence of the stabilization of asset values as well as renewed investor confidence in the sector and allows us to make another material reduction to Group leverage.
“Together with the debt restructure and equity raise late last year, the recent acquisition of the Hemel Hempstead debt at a significant discount and major leasing commitments and loan amendments in Ilford, which we announced last week, this transaction represents a further significant milestone in restructuring the financial and operational position of the Group.
“These ongoing improvements give Capital & Regional a solid platform from which to look to continue to execute our strategy for growth and support our plans for the resumption of dividend payments in the second half of the year.
“I would like to thank the Blackburn center team for their hard work and dedication during their time as part of the Capital & Regional Group. We have been a large part of this vibrant, diverse and important community for over 20 years, and we wish the community, our retailers and the local council continued success as the center embarks on its next phase under new local ownership. ”