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29 January 2015

The St. Enoch Centre in Glasgow is ranked as one of the top 20 largest city centre schemes in the UK. Home to leading high-street stores and located at the junction of Glasgow’s busiest shopping streets - Argyle Street and Buchanan Street – St. Enoch welcomes over 19 million shoppers a year. Since opening in 1989, St. Enoch has led the way for shopping centre innovation in Scotland. 

The Context
In partnership with Sovereign Land, Blackstone, the premier investment firm, approached FSP, one of the UK’s leading retail property consultancies, to provide a pre-acquisition assessment as part of its initial purchase review. Blackstone is the largest real estate private equity firm in the world, with $80 billion of assets under management. St. Enoch had received a £150m investment in 2011, transforming the site and enhancing the customer experience.

The Challenge
Together with Sovereign Land, the retail and mixed-use property investment and development specialists, Blackstone wanted to identify the performance of St. Enoch’s retailers. As Blackstone’s first investment in Glasgow, a tight timescale was in place to support its assessment of the Centre’s potential. Key to this was setting the retail scene in Glasgow from a competitive perspective as well as comparing the city as a retail destination with other major UK locations.

The retailer due diligence was carried out on the 800,000 ft² centre.

As Alia ElGazzar of Blackstone explains, “We needed a clear understanding of St. Enoch’s retail performance as well as an overview of both the macro and micro issues influencing shopper behaviours in Glasgow. Accuracy, speed and depth of detail were paramount and we knew FSP was the team to deliver this.”

The Solution
The research included a retailing comparison of Glasgow, exploring key regional strengths against locations such as Silverburn and Braehead. Retailing in satellite centres around Glasgow has expanded considerably in recent years. This has been countered by further investment in the city centre’s 3m² feet of retail floorspace, including the Buchanan Quarter and the Princes Square Shopping Centre, as well as the £150m redevelopment of St. Enoch.
A review of Glasgow’s performance within a national context, compared to centres such as Manchester, Birmingham and Leeds, further highlighted Glasgow’s strength and resilience as a trading destination. While the city centre recognises strengthened competition as a result of growing online sales and increased emphasis on shopping as a leisure experience, its dynamic, well-established high street retail offer continues to expand.

With FSP’s research providing a full understanding of St. Enoch’s catchment and shopper profile, together with the wider opportunity presented by Glasgow, Blackstone progressed the £186m acquisition of the Centre and has substantial plans in place to enhance its retail, leisure and catering offer.

The Future
With the acquisition complete, Blackstone is working closely with Sovereign Land to develop St. Enoch’s strengths and consolidate its position as a major retail destination in Glasgow city centre.

John Fell, Director at FSP comments, “While Glasgow has the fifth highest resident population of regional locations outside London, it has the highest shopper population outside the capital by some margin. St. Enoch is a major part of the city centre offer and recent investment has ensured that great brands continue to be attracted to it. With the combined strength of Blackstone and Sovereign Land behind the Centre, it now has the support it needs to achieve its full potential.

Blackstone and Sovereign Land continue to use FSP’s research to shape St. Enoch’s tenant mix strategy.
Alia ElGazzar comments, “Glasgow presents an exciting opportunity to create an exceptional shopping experience – from the best performing retail brands through to a strong F&B and leisure offer. FSP’s detailed research helped us to fully assess the opportunity from an investment perspective. Our goal now is strengthening the customer experience for city centre shoppers in the future.”

 

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