Kingsway Shopping Centre in Newport city centre has been sold for nearly £400,000 below its guide price weeks after going into receivership when its leasehold owners were placed into liquidation due to financial difficulties. The leasehold for the centre was now been sold for £615,000 to an unnamed buyer – £385,000 below its guide.
The shopping centre, which includes Sainsbury’s and Starbucks, saw another chain leave in Wilko earlier this month – another blow in a long line of high-profile departures. In May the shopping centre was put into property receivership and in August liquidators were appointed to Kingsway Investments (Newport) LLP, which operates the centre and owns its leasehold.
It is hoped the purchase, which includes Sovereign House at Commercial Street, could secure the centre’s long-term future in a boost to a city which has long struggled to re-establish itself as one of south Wales’ major shopping hubs. For the latest Newport news, sign up to our newsletter here.
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The centre currently provides space for 36 retail units, many of which are vacant, as well as office space, a gym, and a car park. The gross contracted income in rent from the shopping centre as of this month was £1,186,682.
The sale price of the centre might come as a shock to some with it selling for the same price as many houses currently on offer in the city. According to Rightmove you’d currently have to fork out £10,000 more for a four-bed detached property in Bassaleg. And you’d have to find £35,000 more for a four-bed detached house in Langstone.
According to Newport-based commercial property expert Dan Smith, of M4 Property Consultants, the secret to the centre’s future success could be to fill the units with more varied tenants. He cited nearby Newport Arcade as an example of a shopping area now thriving with a mix of tenants. Newport Arcade includes a florist, a coffee shop, an art gallery, and a skater store. We wrote about the rejuvenation of the arcade here.
Jemma McAndrew, receiver and partner at Cushman & Wakefield, told WalesOnline the difficulties for the Kingsway “reflected changes that occurred in the retail sector over the past few years”. “By nature of the retail environment at the moment running shopping centres and enticing tenants requires a significant injection of capital,” she said. “Any new owner is going to need the cooperation of the council in respect of a grace period on the head rent in some shape or form. The asset's income profile will be challenged even more with Wilko leaving." A spokesman for the council has said it will “work with any new developer to ensure ongoing viability” and has "offered a range of business rate relief to retailers in the city centre and will work with any developers to ensure ongoing viability".
