Blackstone acquires Livingston Designer Outlet for £100m

By Kasmira Jefford - Friday, September 08, 2017 15:01

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Blackstone has exchanged contracts to buy Scotland’s largest outlet mall, Livingston Designer Outlet, from LaSalle Investment Management for around £100m, with LIM almost doubling its return on its original 2013 investment.

LaSalle brought the Livingston Designer Outlet to market in May with Cushman & Wakefield instructed to handle the process. The sale, first revealed by CoStar News last month, reflects a net initial yield of 6.5%.

The 300,000 sq ft shopping destination, located 18 miles west of Edinburgh in Livingston town centre, was built by outlet operator McArthur Glen in 2000 and is home to over 70 shops and restaurants selling products at a discount to the high street price. 

Brands include Lindt, Fred Perry Kurt Geiger, Lacoste, Tommy Hilfiger, Nike, Adidas, M&S and Next.  The centre also features an 8-screen Vue Cinema and 18-hole mini golf venue.

LaSalle acquired it in 2013 for around £52m from joint owners McArthur Glen, Land Securities, clients of Aviva and Richardson Property Group.

Blackstone owns a number of upmarket factory outlets in Italy, through its fourth fund, Blackstone Real Estate Partners Europe IV. However Livingston Designer Outlet is thought to be its only prospective outlet in the UK.

Realm, the outlet’s operator recently announced some 25,335 sq ft of new lettings with brands including Barbour, Timberland and Hugo Boss all committing to the scheme.

The outlet sector, where retailers sell their goods at a discounted price of as much as 70%, has been one of the most resilient formats of the retail property market thanks in part to a fundamental shift in consumer shopping behaviour since the recession towards better value for money or discounted goods.

They also generally operate on model based on turnover as opposed to relying on rent reviews, giving owners of outlets greater transparency on how their tenants are performing.

The sector has seen heightened activity over the past year as investors seek out higher growth markets. Land Securities snapped up three shopping destinations in Somerset, Braintree and Castleford for around £340m in May, as revealed by CoStar News.

Hammerson has also increased its ownership of premium outlets through VIA Outlets, its partnership with Value Retail, APG and Meyer Bergman.

Blackstone declined to comment.

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