Great Northern Warehouse sold for £71m

GREAT Northern Warehouse, the leisure complex in the heart of Manchester city centre, has changed hands for more than £70m.

The former railway goods warehouse next to the Manchester Central complex is home to the All Star Lanes bowling attraction, a cinema, car park, gym and Manchester 235 casino.

A sale has been mooted for several years and at one stage Manchester city council made a £70m bid for the asset, which was accepted by owner Capital & Regional, only for cinema operator AMC to block the deal.

C&R said it had exchanged contracts for the sale of Great Northern, to Resolution Property for an initial cash consideration of £71.1m. Part of the proceeds of the sale will be used to repay the £57m loan secured on the property, following which it will be debt-free.

The deal, due to be completed by the end of this month, will see Capital & Regional entitled to additional deferred consideration resulting from the installation and letting of a digital media screen at the property. This will be subject to obtaining planning consent.

C&R expects the total consideration to be close to £72.5m when this is factored in. After paying off debt the remaining proceeds will be held for general corporate purposes and for re-investment in the company’s core shopping centre business.

Hugh Scott-Barrett, chief executive of C&R said: “The disposal of Great Northern Warehouse is a critical milestone in the delivery of the company’s strategy, as it results in the repayment of all  the remaining on-balance sheet debt and further reduces the company’s see through net debt to value.

“It also facilitates further re-investment in  our core UK shopping centre business as we continue to execute our strategy for growth.”

The Great Northern acquisition marks a rapid return to Manchester by Resolution, which sold the Printworks complex in the city to Land Securities for £94m in late 2012.

Resolution Property said it had co-invested alongside Hong Kong-based property company Peterson HK.

It said it is “exploring a number of opportunities for mixed-use refurbishment and development, to complement the existing line-up of strong retail and leisure brands already on site”.

Director Robert Wolstenholme, added: ““The Great Northern Warehouse is a strong regional asset which, as a result of some good letting activity, benefits from a healthy income stream from a diverse range of occupiers, including a number interesting independent operators who are breathing new life into the property.

“Manchester is the UK’s second largest city and one of its most dynamic and with our co-investor we aim to work on some exciting improvements to this strategically located asset in close partnership with Manchester City Council, which shares our ambition for the continued rejuvenation of this key quarter of the city centre.”
 
Jones Lang LaSalle represented Resolution Property in the acquisition and CBRE advised Capital & Regional.

Patrick Duffy, real estate partner at Irwin Mitchell in Manchester, advised Resolution.

 

 

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