Retail warehousing giant Pillar, which is now owned by British Land, is the frontrunner to buy Ikea’s 110,000 sq ft Eastgate centre in Bristol.
The company’s Hercules Unit Trust has bid close to £58m for the retail park, more than £10m above its £46.5m asking price. The price reflects a 3.75% initial yield.
Inter Ikea, the property development arm of the flatpack retailer, put Eastgate up for sale in July as part of a move towards a complete exit from its UK retail park investments.
More than half-a-dozen bids were submitted for the retail park by parties including Scottish Widows, BP Pension Fund and LxB. All bids were above £50m, with the majority offering around £5m over the asking price.
Eastgate is one of the few remaining non-Ikea store properties owned by the group. Earlier this year, Ikea sold two investments in Warrington a 58,000 sq ft Wickes and former Courts shop, and a 30,500 sq ft Boots and Next store in a £33m deal to Prudential Property Investment Managers.
It also wants to sell out-of-town development sites in Northampton and Southampton, where it is unable to secure planning consent for Ikea stores.
The Swedish retailer bought Eastgate, along with a parcel of development land, in 1996 for £19m. It then built an 188,000 sq ft Ikea of which it will retain ownership on the land adjacent to the park.
The retail park is expected to go under offer early next week, following board approval.
Jones Lang LaSalle advised Ikea. Wilkinson Williams acted for Pillar.
References: EGi News 02/09/05
