This article explores the recent trend of retailers becoming landlords, highlighting the strategic property acquisitions by Frasers Group and Ikea.
- Frasers Group expands its property portfolio with the acquisition of Frenchgate shopping centre in Doncaster.
- Shopping centre prices have decreased by up to 90% over recent years, making them attractive investments.
- Retailers aim to leverage their brands to reposition shopping centres and boost profitability.
- This trend signifies a strategic shift in how retailers engage with high street and regional town centre development.
The Frasers Group has made headlines with its acquisition of the Frenchgate shopping centre in Doncaster, marking its third property investment following The Mall in Luton and Overgate Centre in Dundee. The group, led by Mike Ashley, strategically invests in retail properties, taking advantage of the significant drop in commercial property prices, which have fallen by 60% to 90% since 2015 according to Knight Frank.
Frasers plans to anchor these shopping centres with its own brands such as Sports Direct and Flannels, aiming to enhance the centre’s appeal and increase footfall. The Doncaster deal specifically will allow Frasers to expand its Sports Direct store to over 35,000 sq ft. This approach follows a similar strategy used in the past, where the group acquired distressed retail sites, refurbished them, and later sold them for profit.
Similarly, Ikea has also entered the realm of shopping centre ownership with its acquisition of Brighton’s Churchill Square. This follows its investment in Hammersmith’s Kings Mall, now known as Livat Hammersmith, where it opened its first UK small-format store. Ikea aims to fill retail gaps in the UK market, focusing on site development rather than purely being a landlord.
Experts suggest that having retailers like Frasers and Ikea as anchor tenants in shopping centres can significantly increase the site’s value, improve footfall, and enhance rental incomes. The strategy of buying undervalued properties and utilizing popular retail brands as leverage is seen as a savvy investment move.
Both Frasers and Ikea’s ventures are viewed as advantageous for regional town centres needing revitalisation, providing a boost in redevelopment and increasing shopping centre desirability. Frasers Group CEO Michael Murray emphasised the group’s commitment to revitalising high streets in the UK, blending top retail brands with enriched consumer experiences.
The strategic property acquisitions by Frasers Group and Ikea signify an evolving trend where retailers expand their roles to become influential players in commercial real estate.
