Development giant, St Modwen has exchanged contracts to acquire part of Kirkby town centre from Tesco for £35.8m, reflecting a net initial yield of 9% on the main shopping centre.
Tesco announced at the start of this year that it would not be going ahead with its planned 300,400 sq ft scheme in Knowsley, which included a 140,000 sq ft store and 90 retail units, due to a “disappointing performance”.
Plans for the store and accompanying retail units were approved in 2011 as part of a £200m regeneration of Kirkby town centre, with Tesco funding £1m enhancements to the market and improvements to council buildings.
Kirkby town centre currently comprises 400,000 sq ft of retail and leisure space which is leased to 80 tenants.
The sale to St Modwen will now lead to a multi-million pound retail-led regeneration of Kirkby town centre, spearheaded by St Modwen and carried out in partnership with Knowsley Council.
A statement from St Modwen said that the partnership would work on plans to develop and expand the retail centre and complement the existing offer, as well as the provision of a significant new housing scheme on a 65-acre site situated close to the town centre.
St Modwen’s in-house asset team will take over the management of the centre.