Multiplex and its joint venture partner Aldersgate have sold their respective 25% stakes in the Union Square retail/leisure development in Aberdeen, Scotland to major shareholder Hammerson Plc for a total £20 million.
The sale confirms strategies set out by Multiplex managing director Andrew Roberts in February this year, where Roberts said the group is looking to reduce the number of development assets in the UK and focus only on a selected number of “core projects”.
“This sale to Hammerson allows Multiplex to realise value generated over the past three years. We have improved the planning consent and advanced the project, thereby increasing the value of the site,” Multiplex Developments UK chief executive Jayne McGivern said.
“However, having reviewed the letting risk, programme for delivery and timing of profit release, both Multiplex and Aldersgate concluded that Hammerson is best placed to take the scheme forward as sole owner on the basis that the early profit can be reinvested in other opportunities,” McGivern added.
Multiplex has acted as development manager for the 50,000 sqm scheme. Following this transaction, Hammerson has taken full control of the development, with Multiplex retained as project managers for the Phase I freight terminal relocation and station development works.
The proposed scheme on the nine hectare site adjacent to Aberdeen’s railway station is a hybrid of a traditional mall and retail park, providing: 21,000 sqm of retail units; a 16,300 sqm retail terrace; 7,800 sqm of leisure and catering; a 4,200 sqm Cine UK multiplex cinema; 1,700 parking spaces; and a civic square.
The first phase of the development is expected to begin later this year and around 40% of the scheme is pre-let or in solicitors’ hands.
The estimated total development cost of the scheme is approximately £190 million and the projected net rental income is £13.7 million per annum
Multiplex’s proceed from the sale totals £10 million. The group bought a stake in the Aberdeen project as part of a £585 million Duelguide/Chesfield bid with Westfield and the Reuben brothers.
The Duelguide purchase also included the lucrative £4 billion Stratford City project.
In February this year, Multiplex sold its 25% share in Stratford City for £100 million to the Reuben brothers, who have since sold their 50% stake in Stratford City along with Stanhope Plc who sold its 25% stake to Westfield for a total of £140 million.
By Adam Parsons
