Altum Capital acquires Debenhams in Nottingham for £26m

By Kasmira Jefford - Monday, September 04, 2017 15:16

The Debenhams in Nottingham has become the latest building let to the department store chain to change hands after being acquired by Altum Capital for £25.85m.

Standard Life has sold the freehold of the 191,000 sq ft store for above the £24m asking price, reflecting a yield around 5.3%.

Altum said the deal was part of its plans to buy long income assets and also had the potential to be converted into other uses in the future. The building, on Old Market Square, is let to Debenhams until 2040, with a current rent of £1,479,983 per annum and the benefit of future fixed uplifts.

Jack McCarron of Altum Capital said: “We have acquired this attractive building, occupying a substantial corner site in the heart of the city centre. Nottingham is a vibrant shopping destination and is attracting significant investment over the next few years. This acquisition demonstrates our strategy of acquiring assets with long-term income, as well as benefiting from potential alternative use value. We are considering a number of other similar opportunities across the UK.”

GL Hearn advised Altum Capital. Colliers International represented Standard Life.

There has been a spate of Debenhams and House of Fraser department stores brought to market since the beginning of the year, the majority of which are being sold by institutional owners as they seek to reduce the exposure or weighting of their funds towards a single tenant. 

The sales have come amid increasing nervousness over the health of the high street and the impact of higher prices and a slowing wage growth on consumer spending.

In June Debenhams chief executive Sergio Bucher cautioned that full-year profits would be at the lower end of expectations due to volatile market conditions.  The company embarked on a turnaround last year aimed at reviving the chain's performance, in part by boosting its appeal to mobile shoppers. It is also reviewing the future of 10 stores over the next five years and will shut 11 warehouses as part of its plans. 

Despite uncertainty in the market, property industry sources said there was still good demand for good quality, well-located high street assets, particularly properties offering long, indexed leases.

Last month, LaSalle Investment Management, advised by Colliers, sold the freehold of the Debenhams in Eastbourne for c.£13.8m to a private investor advised by Strutt & Parker. The store is let to the retailer until 2034 at a rent of £885,532 per annum, with fixed minimum increases throughout the lease. Other stores let to Debenhams currently on the market are Swansea, Hull, Southport, Southampton and Manchester.

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