Royal London Asset Management Property acquires 50% share in the centre:mk

• With an annual footfall of over 21 million, centre:mk is one of the UK’s leading shopping centres, anchored by M&S, John Lewis, Harrods H Beauty, TK Maxx, Boots and Next
• The 1.3 million sq ft shopping centre represents 80% of the total retail floor space in central Milton Keynes

Royal London Asset Management Property has acquired a 50% stake of centre:mk, Milton Keynes’ primary shopping centre, from AustralianSuper.

The acquisition aligns with Royal London Asset Management Property’s strategy to invest in well-let and re-priced shopping centres with a strategic Net Zero Carbon pathway, delivering core income returns from rebased rents with capital growth potential. The remaining 50% share of the shopping centre is owned by Federated Hermes on behalf of  BTPS.

Drawing an annual footfall of over 21 million, centre:mk is one of the UK’s leading shopping centres. A Grade II listed, purpose-built shopping centre constructed in 1979, centre:mk spans 1.3 million sq ft in the centre of Milton Keynes, located approximately 50 miles northwest of London. Representing 80% of the city centre’s total retail space, it is the dominant shopping destination in the region.

Anchored by leading national retailers including M&S, John Lewis, Harrods H Beauty, TK Maxx, Boots, and Next, centre:mk boasts a strong, stable income stream and a low 4.4% vacancy rate compared to the UK average of 10%. Healthy supply-demand tension, supported by robust tenant interest and rebased rents, offers potential for sustained income growth.

The shopping centre also benefits from a modern multistorey 1400 space car park built in 2018, which offers customers modern parking assist technology.

Retail forms an important component of Royal London Asset Management Property’s strategy, as demonstrated by the recently announced plan to undertake a significant revitalisation of the two-acre Mayfair Quarter in Central London. The purchase of centre:mk follows Royal London Asset Management Property’s sale of Quedgeley Retail Park in Gloucester to Frasers in September, and the Homebase in Winchester in October.

Paul Nicholson, Senior Asset Manager at Royal London Asset Management Property, said:

“This acquisition marks a significant move for Royal London Asset Management Property, demonstrating our confidence in the retail market's recovery and the future success of well located, best-in-class shopping centres such as centre:mk. As consumer confidence improves, low inflation and high earnings growth are expected to enhance spending power, subsequently boosting retailers' sales. centre:mk, as a catchment-dominant shopping centre, is poised to benefit from this recovery.

“Underpinned by high footfall and sales, centre:mk offers a strong, stable income stream coupled with a low vacancy rate, significantly below the UK shopping centre average, highlighting its resilience and appeal. This acquisition enhances our balanced portfolio by increasing our retail sector exposure. We anticipate strong returns and excellent rental growth, and look forward to working with Federated Hermes to further centre:mk’s success.”

Royal London Asset Management Property was represented by Knight Frank and DAC Beachcroft LLP, with AustralianSuper advised by JLL, Griffiths Eccles and Linklaters LLP.

-Ends-

Find out more about Royal London Asset Mangement Property

The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.