Victoria Centre part of £445 million deal following intu collapse
Nottingham's Victoria Centre has been part of a £445 million deal that represents the biggest of its kind for a shopping centre in five years. The site was previously run by intu, which went into administration in 2020 due to factors including the coronavirus pandemic.
The site has since been operated by SGS and that group has now agreed a £445 loan million with Lloyds. As well as the Victoria Centre, the deal covers Lakeside in Essex, atria in Watford and Braehead in Glasgow.
The four shopping centres, all run by SGS, now have an average occupancy rate of around 93% and experts say sites like the Victoria Centre will only becoming "stronger" going forward. Despite having faced difficulties in the immediate years following the pandemic, rental income across the four sites has now increased by over 20% since 2020.
It means the value of the assets themselves have increased, with the four sites said to be worth a combined £858 million. The new deal, done in partnership with digital bank OakNorth and Lloyds, provides SGS with £445 million worth of "senior debt facilities."
Senior debt facilities is a type of financing giving the lender the highest priority for repayments, meaning Lloyds would be first in line for cash if SGS ever ran into difficulty. A previous financial restructure at SGS was signed in 2021, when the group had debt totalling £1.3 billion.
That deal saw the repayment of £600 million in debt being extended to 2024. Speaking about the latest deal, SGS non-executive chairman Jaap Tonckens said: "These leading retail and leisure assets have gone from strength to strength over the past four years.
"The overwhelming support for the recapitalisation reflects this very strong performance and investor confidence in prime shopping centres. I look forward to being a part of the next phase of the SGS journey to build upon the achievements to date."
Max Saidman, director of debt finance at OakNorth, added: "All four sites have seen robust year-on-year growth to footfall and occupancy rates, reflecting the positive consumer demand for shopping centres in the South East, Midlands, and Scotland. Furthermore, with UK consumer confidence rising to its highest level in more than two years earlier this year, we see the attractiveness of these sites getting stronger moving forward."