28th June 2019
SOVEREIGN CENTROS ON PUTTING THE PURPOSE INTO RETAIL REPURPOSING.
CoStar catches up with Sovereign chief Chris Geaves to see how it is working with investors such as Orion, Blackstone and Europa Capital to revitalise town centres.
With the retail world facing existential crisis at present and the High Street seemingly on life support, one of the silver bullet phrases turned to by landlords and local authorities is “repurposing”. One company that can credibly claim to have been there and bought the T-shirt over decades of work masterplanning and “repurposing” major town centre retail mixed-use schemes is Sovereign Centros. CoStar News caught up with chief executive Chris Geaves to find out how “repurposing” and good old fashioned asset management can be made to work in practice in the UK’s town centres.
Chris Geaves is wearing his decades of graft as a retail adviser and developer proudly just now.
“There are very few in the market who do proper development, who have developed ground up malls in a town centre or who are currently re-orientating malls orundertaking major refurbishment and extensions, and we have and currently are,” he says. “It puts us in a very good place.”
His company has more than £2bn assets under management and a development programme of more than 2m sq ft, with a focus on shopping centres, retail parks and mixed use. That might not be the best place to be if you read the headlines about the beleaguered UK retail real estate world, but Geaves begs to differ.
Sovereign Centros’s journey to partners of choice for major investment such as Orion, Blackstone, Delancey, Europa Capital, InfraRed, UBS and CBREGi has seen the group get its hands dirty at a number of major UK retail "repurposings" before the word was in fashion.
Geaves took over as chief executive of Sovereign Land in 2009 from Strutt & Parker. In 2012 the company completed the transformative acquisition of the 1966-founded Centros from Delancey to create Sovereign Centros. “Jamie Ritblat [Delancey's owner] has been a great partner and very supportive of us,” says Geaves.
In Centros’s latter years it operated as a fee-based development manager on behalf of institutions and third party land owners and was noted for its urban regeneration skills. Projects included the development of the Arc Shopping Centre in Bury St Edmunds and N1 Islington, London.
Geaves explains: “Centros was such a good fit for us and is fully integrated into the business. The background to Sovereign has always been working with really good partners.”
Over the last three years, Geaves says the business has diversified by adding really skilled people with residential and industrial capabilities. "Residential as it works as a key ingredient to reinvigorate town centres and industrial for logistics where retail and industry meet head on,” he explains.
Geaves adds: “Not many companies in our space have these other strands of business skill or the development and refurbishment track record to deal with all of the issues facing retail environments.”
Geaves points to a range of “very good examples” where it has identified short comings in assets and is now re-energising key retail hubs.
At Glasgow St Enoch, where it is asset manager for private equity giant Blackstone, the focus has been on shaking up the food and beverage and leisure offer recognising "a real gap in the market" Geaves says. Its redevelopment of the former 90,000 sq ft BHS store to "completely ‘re- anchor’ the centre” via a renewed leisure and retail offer is key.
That has included adding a nine-screen 40,000 sq ft Vue cinema at second floor, and nine restaurants, ranging in size between 2,000 sq ft and 10,000 sq ft which link into the recently refurbished food court. “It is about turning St Enoch in to the place to be in Glasgow,” Geaves says.
In Telford, working with Orion, Sovereign Centros, is in the final stages of creating a major makeover to the 1m sq ft centre. The centre has been “historically unloved”.
Geaves adds: “The scheme has never provided the category killer major fashion stores which the town needs. Next, River Island, H&M and New Look are all taking fabulous new stores. This isn’t being done anywhere else at the moment. Closing and knocking down an existing mall to redevelop and improve it in a town centre is complex and it is difficult to keep everyone happy. That is what we do.”
Recently Infrared appointed Sovereign Centros to take over the asset management and development of the Eastgate Centre in Basildon and the St Georges Centre in Preston. Both centres are busy pushing on with plans to rejuvenate with plans that may include major residential as well as leisure and retail reworkings.
Another recent example of Sovereign Centros flexing its imaginative muscles when aiming to rejuvenate town centre retail came in Corby, where it is asset managing the town centre on behalf of Europa Capital.
CoStar News revealed last week that Mike Ashley’s Sports Direct had bought the former TJ Hughes store from Europa and Sovereign Centros as part of their significant repurposing of the town centre.
The strategic move will see the Sports Direct business move from an out of town retail park.
It’s another example of the crucial repurposing skills Sovereign Centros can bring to the table, breathing life back into some of the UK’s key retail environments, modernising them and making them fit for purpose, Geaves says.
“Some retail centres will regrettably never recover and will be redeveloped into alternative uses. You need to work with and follow the retailer and be imaginative in place making, creating environments to attract the retailer and shopper alike. The market is going through large change, but it's exciting.”