Fremlin Walk Shopping Centre
The investment produced an equity IRR in excess of 50% and a near doubling of equity capital invested
Fremlin Walk was acquired by Scoop from Land Securities for £69 million, in a joint venture with Europa Capital LLP and with debt procured from Deutsche Postbank. At the time the Centre had a significant number of voids and a vacancy rate of 20%, largely as a result of a dysfunctional leasing strategy, poor tenant mix and a number of retailer insolvencies. In addition, despite being some five years old, there remained a lengthy list of outstanding snagging matters.
Scoop prepared and implemented a detailed Business Plan, aimed at stabilising and then increasing net operating income, refining tenant mix and mitigating vacancies, rectifying defects and improving centre marketing, tenant liaison and communications with customers.
An intensive, hands-on approach to dealing with these matters over a twenty-one month period followed, with the ultimate aim of repositioning the Centre and enhancing capital value. A string of new lettings were secured and a thorough audit of the service charge identified areas where savings could be made, with the benefit passed on to tenants. Minor defects in the legal title where also attended to. Such intense action ensured the property was capable of on-sale within a short time frame.
Capitalising on improved investor sentiment, there followed an opportunistic sale to Legal & General for c. £94 million and a near two times equity multiplier.