The owner of Braehead Shopping Centre near Glasgow has completed a "landmark" reorganisation of its finances that will allow the business to return to standard governance and management after falling into administration in June 2020.

SGS, the group that also owns Atria Watford, the Lakeside in Essex, and the Victoria Centre in Nottingham, has completed a recapitalisation of its portfolio that includes £445 million of new financing from Lloyds Bank. This is made up of a £395m senior term loan and a £50m capital expenditure facility.

The group, previously known as Intu SGS, has been controlled by its creditors since Intu collapsed into administration under the weight of its debts during the Covid pandemic. SGS separated from Intu Properties with AlixPartners appointed to an executive management and board role, Global Mutual brought in as asset manager, and Savills as property manager. 

 

The residual £1.3 billion of SGS debt not repaid from today's transaction has been exchanged into equity or equity-like equivalents. The deal has received support from 100% of creditors.

As part of the deal, a new SGS board will be appointed with Jaap Tonckens, former group chief financial officer of Unibail-Rodamco-Westfield, joining as non-executive chairman.

He said: “These leading retail and leisure assets have gone from strength to strength since separating from Intu four years ago due to the excellent work of Alix Partners, the outgoing board members, Global Mutual and Savills.

“The overwhelming support for the recapitalisation reflects this very strong performance and investor confidence in prime shopping centres. I look forward to being a part of the next phase of the SGS journey and working with the new Board to build upon the achievements to date.”

SGS said occupancy across its four shopping centres increased to 93% in December 2023, with more than 300 new long-term leases signed since Global Mutual’s appointment. Rental income rose by 22% to £80.5m during the six months to the end of December.

The refinancing follows a number of store upgrades at Braehead, including health and wellbeing brand Holland & Barrett, lingerie retailer Ann Summers, and bakery chain Greggs. 

Steve Gray, head of European retail asset management at Global Mutual, said the group works closely with its tenants to ensure the offering remains "fresh and compelling" for guests.

"We are therefore delighted that these much-loved brands have decided to invest in their presence [at Braehead]," he said. "It reflects confidence in the centre, our relationships and in physical retail more broadly.

“We’ve seen robust year-on-year footfall growth, reflecting the positive response from our customers – underscoring Braehead’s position as a prime retail and leisure destination."