Debenhams And Arcadia Collapses Could Bring 16.5M SF Of Retail Space To The Market
The liquidation of Debenhams and administration of Arcadia raise the threat of up to 16.5M SF of retail space becoming vacant and coming on to a market with little demand, in one of the worst periods yet for the battered UK retail property sector.
The two retailers have a combined store portfolio of 16.6M SF in the UK, Estates Gazette Head of Retail and Industrial Research James Child said on Twitter. That is the equivalent of six Westfield London shopping centres.
The liquidation of Debenhams will be of more immediate worry to landlords. The company was already in administration and after JD Sports pulled out of a deal to buy the company on Tuesday, administrators at FRP Advisory said they would begin the process of liquidating the company.
The company’s 124 department stores will continue to trade until their stock has been cleared, but after that, unless a buyer for the company can be found or new retailers agree to take over leases, units will close, leaving landlords with big vacant units.
The company’s portfolio totals around 11.4M SF, with an average unit size of 92K SF. The stores are the anchor tenant of high streets and shopping centres across the country. The liquidation puts about 12,000 jobs at risk.
Partners from Deloitte were appointed administrators to Arcadia on Monday after the company was unable to secure more than £30M in emergency funding needed to keep it operating until Christmas.
The stores occupied by Arcadia’s brands, including TopShop, Dorothy Perkins and Burton, will continue to be operated by the administrators while they look to find a buyer.
Arcadia’s portfolio encompasses 600 stores totaling about 5M SF. The company employs 13,000 people.
The investment sale of the company’s best-known property has already begun. Administrators from KPMG have been appointed to the Arcadia subsidiary that owns 214 Oxford St., which houses the flagship store of TopShop, React News reported.
A sales process of the asset is now likely to commence, React said. The asset was once valued at more than £500M, and Apollo refinanced a £310M loan secured against the property that matured last year.
As a store in perhaps the best retail location in the country, the crossroads of Oxford Street and Regent Street, the price achieved in any sale will be closely watched by London retail property owners.
